Measuring HRM Performance

Whether a company retains all of its HRM functions, shares these responsibilities with another firm, or outsources them altogether, it is important to measure the effectiveness of HR activities. After all, if you don’t know how you’re measuring up, there is no way to plan for improvement. Common metrics include measurements of the effectiveness of recruitment and selection, employee satisfaction with compensation and employee productivity.

HRM must also be able to justify their role within the organization, often using Return on Investment (ROI) as the main source of measurement. As you will see later in this course, the actual development and use of these HRM metrics will depend upon the needs of each organization and will likely vary over time, but must strive to accurately reflect the results of the task being measured.