In 2006, while a consultant with CLC Metrics (the former metrics and analytics partnership between Infohrm and the Corporate Leadership Council), I ran a members-only teleconference on strategies for revising an organization’s human capital Key Performance Indicators (KPIs)—metrics used by senior leaders to track workforce performance. The webcast looked at reasons for updating KPIs and successful practices for doing so.
It also contained the results of a short member survey on KPIs, several data points from which are offered below. I wonder what has changed in the 3 years since we did the survey?
KPI Review Format: 57% of respondents indicated that they use internal workshops to bring participants together to review and select KPIs. A slightly smaller percentage used teleconferences, and just 7% hosted online (portal, email) conversations. Workshops are great for facilitating the exchange of ideas, but the risk of groupthink/blinkered perspectives could hinder an open dialog. As such, consider using an external facilitator to bring specialist expertise and serve as a mediator.
Time Allotment: Skewed, with 36% of respondents completing the review in 1-4 hours, while another 29% took more than 24 hours. In reality, the optimal time is probably somewhere in between—a full-day workshop serves to kick-off the process but will likely be followed by one-on-one meetings and team reviews before the final list is published.
Participants in the KPI Review Process: Most respondents involved HR leaders and HR Business Partners in the review process. Only 21% included senior executives. As our terrain has morphed from HR to Workforce to Business metrics, it has increased the importance of involving corporate and LOB leaders in the discussion of what metrics to use. Doing so improves the likelihood that the final list of metrics will be accepted by the business and may help HR uncover some really interesting new measures.
Fast forward to today. For many organizations, July and August sees the beginning of strategic planning and budgeting for the 2010 calendar year. This is often an optimal time to revisit the list of KPIs that your firm uses to measure human capital performance and outcomes. If you’re about to review your KPIs and potentially select new ones, the following questions will help to focus your time and effort:
Business Strategy:
1. For what business issues should we establish human capital KPIs?
2. Which KPIs would my business leaders like to see?
3. Does this set of KPIs best reflect our corporate and LOB objectives?
4. Can we eliminate any KPIs that are not directly tied to business drivers?
KPI Implementation:
5. Are we comfortable setting targets and placing resources against them?
6. How important are external benchmarks for setting targets?
7. Should we use absolute or relative targets?
8. Who should be accountable for KPI goals?
9. How should our HRBPs be using KPIs in strategic conversations?
10. How should our KPIs be made available to internal audiences (dashboards, reports, etc.)?
Tags: HR Metrics, human capital metrics, key performance indicators, KPIs, workforce metrics