What’s one step that should be included in the evaluation of an HR function or HR department? Please share how this step can measure the effectiveness of HR efforts.
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1. Examine Employee Retention Rates
Take a hard look at employee retention rates. High turnover? That’s a red flag waving at you. Dig into why people are leaving and see if HR is actually addressing those issues.
Happy employees stick around, so if HR’s doing its job right, you’ll see those retention numbers climbing. It’s like a report card for HR—simple but telling. HR doesn’t have sole control over bad managers or company culture, but it can absolutely influence and shape improvements.
–Bryan Driscoll, Bryan J. Driscoll, JD, LLC
2. Include Employee Feedback
When evaluating the effectiveness of an HR function or department, it’s important to include employee feedback. Whether it’s employee satisfaction, engagement, workplace culture, or HR services being measured, conducting employee surveys and analyzing the results allows stakeholders or decision-makers to ensure that policies and initiatives are aligning with employees’ needs and expectations and having the desired impact.
That’s the true test of HR’s effectiveness.
3. Conduct Annual HR Surveys
An annual survey or 360-feedback process for HR would be highly effective in sharing HR’s greatest areas of impact and areas for improvement. To gather this information, the survey should seek feedback about employees’ perceptions of HR: Are they helpful? Do they exemplify organizational values? Do they make useful information easily accessible (benefits, payroll questions, policies, etc.)? Are they responsive? Are they kind and compassionate? Are they trustworthy? Do employees at all levels feel supported by HR and view them as a trusted resource?
Organizations would be remiss if they did not ask the very people for whom the department exists about their perceptions of and experiences with HR.
–Tiffany Slater, HR TailorMade, LLC
4. Implement Employee Satisfaction Surveys
One crucial step in the evaluation of an HR function is the implementation of an Employee Satisfaction Survey. This tool gathers feedback directly from employees regarding their experiences and perceptions of HR services. By focusing on areas such as communication, support, conflict resolution, and overall job satisfaction, the survey provides quantifiable data on employee relations. The effectiveness of HR efforts can be measured through the survey’s results, highlighting strengths and pinpointing areas needing improvement.
For instance, high satisfaction scores in conflict resolution indicate effective HR intervention, while lower scores in communication may suggest a need for better transparency or more frequent updates. Analyzing trends over time can also reveal the impact of new policies or initiatives, allowing HR to adjust strategies and ensure a more positive work environment. This continuous feedback loop not only measures HR effectiveness but also fosters a culture of openness and continuous improvement.
5. Evaluate Training Program Impact
Evaluating the efficiency of training and development programs in terms of impact on employee performance is imperative in measuring the success of HR endeavors. This can be achieved via pre- and post-training evaluations, performance reviews, and feedback from participants. For instance, by conducting post-training assessments, an HR department can measure how well a training program in leadership contributes to improving leadership competencies and work-team performances.
For instance, measures might include improved decision-making abilities, better group dynamics, or increased productivity. Longer-term measurements can be made using factors such as one’s career progress over time. When training programs are successful, employee abilities go up, employees are more satisfied with their jobs, and the organization as a whole grows.
Upon completion of the evaluation, the HR department can be confident that its training programs directly support the company’s strategic goals for developing its workforce.
–Sunaree Komolchomalee, Cupid Digital PR Agency
6. Review the Performance Management System
Reviewing the performance management system is an additional critical component of assessing the efficacy of HR. This evaluation assesses the extent to which the existing system facilitates employee development, is consistent with organizational objectives, and enhances performance.
Clear expectations, consistent feedback, and opportunities for professional development are essential components of effective performance management systems. HR should solicit input from both managers and employees regarding the strengths and shortcomings of the existing system. For instance, HR may determine that employees believe the performance-review process is infrequent or that the feedback provided is not actionable. Furthermore, the examination of the correlation between performance-review scores and actual job performance can reveal discrepancies, which may suggest potential biases or deficiencies in the evaluation criteria.
HR can enhance the performance management process to more effectively support organizational objectives and employee development by identifying and addressing these issues. Monitoring improvements in employee engagement, satisfaction, and performance as a result of changes to the performance management system serves as an example of HR’s role in fostering a high-performance culture and facilitating individual and organizational success.
–Timothy Allen, Oberheiden P.C.
7. Keep Direct Feedback Anonymous
One essential step in evaluating an HR function is conducting employee satisfaction surveys. At Alpas Wellness, we implemented regular anonymous surveys to gauge employee satisfaction with HR services and initiatives. This step measures the effectiveness of HR efforts by providing direct feedback from employees on areas such as onboarding, benefits administration, and support services.
For example, after noticing lower satisfaction scores in our onboarding process, we revamped it based on employee feedback, resulting in a smoother onboarding experience and higher retention rates. Regular surveys ensure that HR efforts are aligned with employee needs and continuously improve the workplace environment.
8. Use Employee Engagement Surveys
HR work is very complex and involves many different tasks. This makes it seem as if the work itself is intangible and impossible to evaluate. One crucial step I always advocate for is conducting an Employee Engagement Survey. This tool directly measures how our HR team’s efforts impact the organization and how effective they are.
At KIS Finance, I launched our first comprehensive engagement survey to get real insights from our employees. The survey results revealed specific areas where our HR team needed to improve, particularly in career development and communication. Acting on this feedback, I personally met with employees to discuss their career goals and address their concerns.
We didn’t stop at conversations. We also updated our training programs and created various career pathways. It was astonishing how much employee satisfaction increased as a result of these adjustments, and attrition rates significantly decreased. The survey results gave us hard proof of how successful our HR initiatives were.
These regular surveys allow us to track progress and measure the impact of our HR team. We stay responsive to our employees’ needs and continuously refine our HR strategies. When employees see that you actually listen to and act on their feedback, it builds trust and a sense of belonging.
In a nutshell, a regular Employee Engagement Survey ensures that our HR efforts align with our employees’ needs and our strategic goals. Through years of constant practice, I’ve found this step to be the most effective in the actual evaluation of our HR methods.
9. Align with Organizational Goals
An HR department may be functioning optimally by its own and even HR industry standards, but if it isn’t aligned with an organization’s specific list of goals, even great milestones will have negligible impact on organizational growth and well-being.
For example, even when an HR team meets its own expectations for talent acquisition, even surpassing industry benchmarks, it may fall short of meeting company demands. The case could be similar to other elements, such as training and development, performance management, and organizational duties.
It is, therefore, crucial to include the component of alignment with organizational goals when evaluating the functioning of this essential department.
–Anilkumar Shetty, TecHighQ IT Solutions
10. Measure High-Performer Turnover Rate
Measure high-performer turnover rate. Measuring a high-performer turnover rate helps you assess how well your company retains its top talent, which is critical for maintaining a competitive edge. A high-performer turnover rate could indicate underlying issues such as a lack of career development opportunities, dissatisfaction with management, or low compensation.
Addressing these issues is critical to keeping your top talent long-term, which is essential to the success of key projects. The HR department needs to keep track of this metric to inform strategic decisions such as improving employee engagement, enhancing leadership development initiatives, and revising retention strategies.
11. Monitor Compliance and Risk Management
When you’re juggling a global workforce like we do, with writers and strategists scattered from Cape Town to the U.K., compliance is an important step.
Monitoring compliance and risk management means you have to build a robust system that tracks labor laws across multiple jurisdictions because when our team knows you’re on top of their local labor rights, it creates a sense of security that translates into higher productivity and loyalty. We measure effectiveness through regular audits, tracking any compliance issues or near-misses, and surveying our global team on their understanding of their rights and our policies.
12. Assess HR Capability
To figure out how well my HR team is doing, I take a good look at what skills we have in the company. This means making a list of everyone’s strengths and what they’re experts in. It also helps see who’s interested in learning new things. Performance reviews are a good time to do this, but the old-school review style is kind of outdated.
By understanding strengths and development areas, we can make sure we have the right people in the right roles and can invest in training to fill any skill gaps. This all helps us achieve our goals faster.
–David Magnani, M&A Executive Search
13. Examine and Compare Multi-faceted HR Metrics
This step is establishing a multi-faceted HR metric for evaluating recruitment and talent retention. A short time-to-hire (the total time taken from job posting to hiring) does not always mean good hires. Simultaneously with this indicator, we at our staffing agency track retention rates. The retention rate should be high. In our case, it’s above 90% of hires who prove they are a good fit for a position and loyal to the team. If we quickly hire someone, but they leave soon, well, that means that our short time-to-hire is an illusion of successful recruitment and that time grows in the end as we start a hiring campaign again.
Besides evaluating time-to-hire alongside retention rates, it’s a good practice to pay attention to the combo of a low Interview-per-Hire ratio and a high Offer Acceptance rate. The fewer candidates you have per one position, the better your filtering process might be. Yet this should be confirmed at the last recruitment stage. You should leave not only a few candidates with great skill matches, but they should also be those people who will prefer your offer over a competing one.
Finally, I’d differentiate the Cost per Hire for different positions. While it’s acceptable to pay more for hard-to-fill positions like a Blockchain developer or a Security engineer, the cost to find a Middle Software developer or UI/UX designer should be a bit lower.
14. Gather Employee Feedback on HR
It’s not just the management who needs to be involved but also the employees. You need to ask employees about their experiences with HR managers, such as hiring, training, benefits, and support. In addition to the metrics, they’ll be able to give you a good idea about what is working well and what needs improvement. This needs to be on your list because the very function of HR is to support employees and help them succeed in their jobs.
If most of your employees say they are happy with the training programs, HR knows they are on the right track. On the other hand, if employees express frustration about the benefits process, you know that’s one area that HR can focus on for improvement.
–Riley Beam, Douglas R. Beam, P.A.
15. Analyze HR’s Support for Key Goals
At Helix Sleep, we keep our innovative spirit alive as we grew from a small startup to a larger company by regularly asking employees for feedback to see if HR was doing a good job supporting our main goals of personalization and putting customers first. It’s important to look at how well HR brings in and keeps great employees, especially for key jobs.
When we were just starting out, we needed people who believed in our goal to change how mattresses are sold. We kept track of how quickly HR filled important positions and how long our best employees stayed with us. Our HR team also created special training programs for new hires, and in this program, we measured how quickly new employees got up to speed and how well teams performed overall.