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Analytics of HR and Strategic HR Paradigm

 Analytics of HR and Strategic HR Paradigm

Dr.Umut KÖKSAL

 Founder, UK Training& Consulting

 

For such a long time,  human resources management has been positioned as a semi-managerial process/function where personel observations, attitudes and insticts were the basis of decision-making processes.

With globalization, advance in technology and the corporate competency and performance dilemma, HRM started to have obligation to give much more attention to the ‘'math of management'' and analytics.

Under strict hyper competition and the change of work environment, business intelligence in HR became vital, started to act as a fuel for corporate success.

 

We may argue that as a function, human resources management mostly copes with intangibles and the performance is generally deemed outside the purview of magnitude. Though, with transforming times,the HR department is gradually understanding the substance of quantifying the qualitative HR methods(1).  

It has been suggested that the measures used for HR in terms of performance management should  not be just activity orientated, backward looking and should not concentrate on individual practices.

HR Measures should be impact, forward looking and focus on the whole HR System(2).

‘'HR as a strategic partner ‘' motto has been under the radar for a long time. In order to become vital part of company's future, as a department, human resources management executives have to understand one thing that they desperately need to improve their understanding of business strategies and design much better metrics,analytics. Otherwise, no possibility for HR to become a strategic partner of the company or company top management.

Moreover, it has been identified the use of metrics as one of four characteristics that lead to HR being as a strategic partner(3).  

The degree HR Metrics produce a link to company's strategic management, the value HR Deparment has. Or the perception of internal customers for HR Department.

HR's role as  a strategic  partner can only be supported and find meaning in terms of developing and implementing HR Metrics and Workforce Analytics into it's core and sub-processes. As a strategic partner, HR executives first goal should be evaluationg HR's impact on company's business goals. In order to do this, they need to develop HR Metrics for tracking performance, align these HR Metrics with corporate strategy and strategic decisions.

By the help of HR Metrics, HR departments, specifically HR executives have an advantage to constitute a communication for the goals achievement and have a sustainable  predictive  BI.

HR Metrics also assist HR department in risk exposure determination and measurement. They give allowance HR employees to communicate value,speak the business language-the language HR departments most of time lack- and at last foster responsibilites,assign accountability.

However, this is not an easy mission to accomplish. As it has been argued, there are some obstacles  for bringing an analytical and math-way of thinking to HR measurement(4):

Lack of HR experience and precision and difficulties in measurement.

To be successfull as a strategic partner, HR departments should use numbers to persuade others. By others, we mean internal customers of the HR department such as CEO,CFO,CTO, department directors,managers and other employees of the organization.

For this persuasion and the need for assertiveness communication toward the employees, HR Metrics are keys.

HR Metrics, if chosen appropriate, there is a chance for an organization enablement to manage,improve performance by improving overall profitability through more effective workforce cost management.

Moreover, fostering HR department's impact on the organization is vital. It is normal to say that as a department, HR, should be a profit center and  operated,managed like a business,like a company itself.

In order to support this article, let's look at a model  developed by Lawler and Mohrman(5). In this model, it has been hypothesized that an important contributor to  a strategic partnership relationship for HR is having the right metrics and data.

At last, data,data analysis should be brought to the strategic thinking platform of company by HR. This actually became an obligation. This contribution should note how human related managerial decisions affect business goals.

 

References

  1. Apoorva Trivedi ,HR METRICS: A BENCHMARK TOWARDS EFFECTIVENESS, , International Journal of Recent Scientific Research Research Vol. 6, Issue, 7, pp.5215-5218, July, 2015
  2. Yeung, A.K. & Berman,B. (1997). Adding value through human resources: reorienting human resources measurement to drive business performance. Human Resource Management,36 (3), 321-335.
  3. Lawler, III, E. E. & Mohrman, S. A. (2003). HR as a Strategic Partner: What Does It Take to Make it Happen? Human Resource Planning, 26(5), 15 (b). 14
  4. Toulson, P. & Dewe,P. (2004). HR accounting as a measurement tool. Human Resource Management,14 (2), 75-90
  5. Lawler, III, E. E. & Mohrman, S. A. (2003),a.g.e.

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