How to measure the effectiveness of the HR director

"Cadres decide everything" - this cliche determines the position of the current directors of personnel is high enough in the company hierarchy. Indeed, so much has been said and written about the fact that the staff - it is an important strategic resource of the company, that they should cherish, to the business flourished. It is for human resource management services and created whole departments whose sole purpose - to properly use this important resource for the company to achieve its global strategic objectives. To the human resources are used efficiently, invented a variety of tools and techniques used by HR-specialists.

Every self-respecting HR director, leaving the labor market in search of work, by all means in his resume lists all the tools and techniques that he knows how to use. Very often, the cost of such a specialist in the labor market is determined by the number of modern techniques, which owns Director of Human Resources. This state of affairs is understandable, since the employer wants to acquire professional HR-specialist, who for the solution of its problems has at its disposal the largest number of different approaches. Advanced is the employer determines the quality and cost of personnel director, not only in the number of technologies and techniques, which he owns, but also on the impact of its past activities. And here the problems begin. How to assess the results of past or current activities of HR-specialists? By what criteria and grounds? What, exactly, is a successful and effective HR director?

I usually ask for interviews to talk about the success in past jobs. Of course, I talk in detail about what was done in this or that company. But I never heard the question as to what economic effect brought my business projects.

And if we analyze and evaluate the work in monetary terms? You think hard? It is not so difficult. Of course, the situations are different. Sometimes the economic effect is obvious, for example, the introduction of International Financial Reporting Standards (IFRS), HR Director, together with financiers should provide training to these standards in order for staff to work with new types of reporting. Trained to work with an established team of IFRS will be much cheaper than disband the entire accounting and hire new employees with the right skills. The cost of training is known, the value of the selection to calculate easily the cost of losses from the lack of personnel is also possible to calculate. Add up the cost of recruitment and loss from a lack of personnel,

But, if your HR Director, decided to implement a new pay system, how to calculate the effect of the introduction? Before approving this project, you need to get answers to questions:

 What's wrong with the existing system of remuneration, to be replaced by a new one?

 How will the new system of remuneration in the business results?

 Will it be less expensive?

 Could she be a stimulant for the growth of productivity and professional level of employees?

 How much will it cost implementation, and whether it is paid back?

Get answers to questions, we will be able to decide whether we should do it, and that we eventually get. In particular we will be able to calculate whether this remuneration system affect the company's financial results.

In addition, we can also understand the purpose pursued by the Director of Personnel. Does it change the remuneration system for the sake of change process, either he does it for solving business problems (for example, to ensure that the new remuneration system has influenced growth performance or sales growth). If he only demonstrated his skill, it certainly has gained additional experience and increased its value on the labor market. But this business is not bought anything, and, well, if nothing is lost. In this case, it is reasonable to think about, and what the company a professional who is expensive (it's a fact!), But the impact on the financial results of the company does not provide? Why do we need all these new-fangled HR-technology?

So, the HR director is successful and effective when it is able to do well three things:

 Control number.

 Manage the personnel costs.

 Manage competencies.

And he does these three things are not just so, and to ensure that the business has been effective, it has brought such income, which was planned rather than a turned; developed or remained stable, depending on the desires of the owner.

numerical control

The effect of the tasks of numerical control, I think, is clear: the smaller the number of personnel produces the required amount of product / service, and the like, the better crafted work your personnel director. In this situation, the employer and the personnel director is necessary to agree only on the criteria for evaluating the effectiveness of its work.

You can focus on the performance of competitors, who have, in your opinion, the best results in numbers. And if there are none, you can concentrate on improving the performance was / was inside the company.

On ways of reducing the number of written and said a lot. The range of methods ranges from reducing unnecessary positions and optimization of business processes to changing production processes and improve the utilization of production capacity. The task of Director of Human Resources - to choose the best technology suited to your business and optimize the number, in accordance with the intended objectives.

Cost management personnel

The effectiveness of solving problems in this area is also quite obvious: the less the cost per person is better. Only need to treat it without fanaticism. It is unlikely that your HR-director will be happy, if we force it to reduce costs to infinity. Most of us are well aware that the cost of staff affected by the state of the labor market, wage growth in neighboring countries on business, inflation processes in the country and the like. Can reduce costs, but only if they are not optimal from an objective point of view.

In this case it is necessary to analyze the following:

Cost structure. It's simple, you need to understand what cost items do not motivate staff and are not binding in terms of labor legislation, as well as those that are rarely used - all of them can be minimized. For example, the common benefit - voluntary medical insurance. What is the number of workers uses policies LCA? In one of the companies in which I have worked, this percentage was not higher than 10. Why should I spend money on benefits that are not used by employees. Can it be abolished or replaced by other benefits that will become more attractive for employees.

The wage structure. You can refuse to co-payments for overtime, weekend work, etc., which are known to be paid at a higher rate. How to do it within the law and painless for employees - the art director of personnel.

In addition, there is a part of the wages as a bonus, to be paid for the results of work, and not to be certainly paid a part of the employee salary.

If the personnel director has managed to ensure that the award really is a bonus, and the staff do not commit voluntary "labor feats" of the double payment - it means labor costs are optimized.

If you think that personnel costs are optimal, then relax still not worth it. In this case it is necessary to talk about the quality planning of these expenditures (budget): the lower the cost overruns happened in the financial year - the better, the more predictable is the company's financial results. And this is also a good indicator.

competence management

Perhaps the results of the tasks of management competencies are not so unambiguous in terms of calculation of economic effect, but the competencies necessary to manage and evaluate the effectiveness of this process in rubles is quite possible.

So, what a lot of the skills required to perform business - tasks, the employee has, and the higher the level of their development, the better. Whether for business competence is not necessary - it is not necessary to assess from the point of view of development and even more to develop it (well, unless you decide to engage in charity).

When we turn to such a difficult task, HR director must first make sure that he had approved a list of competencies that are needed in a given function to perform tasks with the best quality. After that, it is necessary to evaluate the availability of competencies and their level of development in individual employees in specific positions. And only in the presence of these two documents the employer and the personnel director can start to negotiate about the tasks in the framework of management competencies and criteria for performance evaluation.

Of course, at the stage of discussion will need to be defined: one of the staff there is no need to develop, because they have everything in order, someone will have to lay off as hopeless; who has something to teach. But this is a method that will use the personnel director to achieve the goal. To evaluate the effectiveness of the implementation of tasks worth by comparison, it was at the beginning of period / it was upon its completion. If there is a list of competencies and their level of development in a particular employee in a given function, we can easily estimate the result of the work with the employee to develop competences in numbers, much revealing than the qualitative assessment.

By and large, I see only one difficulty in assessing the impact of competence management - we are not always able to immediately and unequivocally to count, what economic effect will bring the development of specific competences of a particular employee. This applies, above all, management competencies. However, when a company decides to develop this particular block of competences, it must be understood for what it is doing. If the goal is clear, it is to translate all this into the real ruble. As a trivial example: the effectiveness of the meetings. If your company for them to spend too much time, and teach their employees to conduct effective meetings, thus reducing the time they are made, and, perhaps, and their number. The cost of one meeting is easy to find: you have to add up all the salaries of participants, divide them into monthly norm hours and multiply by the number of hours spent at the meeting. To complete the picture you can still add on the cost of depreciation of equipment used at the meeting, payroll taxes, and the like. If one meeting was to spend less time and they have become less frequent, we began to spend less money on this feature - this is the economic effect of the competence management.

Thus, if your personnel director shows a positive trend in all three areas described in this article, to be sure - you are the owner of a professional do, and your business from it only wins.