HR Metrics That Count: Aligning Human Capital Management to Business Results

By Weiss, David S.; Finn, Richard | Human Resource Planning, March 2005 | Go to article overview

HR Metrics That Count: Aligning Human Capital Management to Business Results


Weiss, David S., Finn, Richard, Human Resource Planning


This research explores the current capability of HR to report on human capital metrics and the capability needed to report in the future. The study was conducted with 246 HR professionals and business leaders in the United Kingdom and Canada. Although HR professionals and business leaders overwhelmingly believe human capital metrics are important, organizations are not currently focusing on the measures that count. Today, metrics inform rather than drive strategy. Tomorrow, the metrics need to drive strategy. Our research concludes that human capital metrics and reporting need to align to the business strategy to be useful as a driver of business outcomes.

Has human capital management (HCM) found its way to the boardroom agenda at last? Many believe business leaders acknowledge the critical role HCM plays in business success. They believe there is a link between people management and business performance; however, that assumption still needs to be demonstrated.

The challenge to test that assumption escalated with the announcement of the Accounting for People Task Force in the United Kingdom, instigated by U.K. Secretary of State Patricia Hewitt, and chaired by Denise Kingsmill, CBE. This taskforce explored methods of requiring publicly traded organizations to report on their investments in people. The Accounting for People Task Force (report on November 3, 2003) defined human capital measurement as follows:

   Human Capital Management (HCM)--an approach to people
   management that treats it as a high level strategic issue and seeks
   systematically to analyse, measure and evaluate how people policies
   and practices create value.

At the outset, The Accounting for People Task Force appeared intended to develop a list of employee-friendly companies. Investors then could use the list as a guide to their investment decisions in the same way as an "environmentally friendly" list of companies (from best to worst) guides some investor decisions. The hope was that companies would invest in HCM because it could have explicit economic and investment implications.

In preparation for The Accounting for People Task Force report, a joint U.K. and Canadian study explored the current and desired future state of HCM. The primary focus of the study was to explore the current and intended behaviour of organizations with respect to current and preferred human capital metrics. This article presents the results of that research conducted from September to October 2003.

Method

The research was carried out simultaneously in the United Kingdom and Canada. Self-completion surveys were sent to managing directors (line executives) and human resources directors in the top 2000 U.K. organizations, ranked by total sales. Senior leaders in 202 organisations completed the surveys. Respondents were from across the United Kingdom and represented the professional services, IT, and telecoms, manufacturing, and public sectors.

The same survey was distributed through a web-based survey in Canada to senior HR managers in 200 companies mostly in Ontario. Senior leaders of 44 companies responded to the Canadian survey. Exhibit 1 summarizes the respondents who participated in this research.

Demographic statistical comparisons showed that there were no differences between the following groups:

* Between the HR respondents in Canada and in the United Kingdom

* Between the respondents from different levels within HR (i.e., VPs, directors, and managers)

* Between the private sector and public sector respondents

Results

The results of this research are sub-divided into two sections:

1. Current HCM reporting

2. Preferred future for HCM reporting

The findings are presented for the HR respondents in Canada, the managing directors (MD) in the United Kingdom (line managers), and the HR respondents in the United Kingdom. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

HR Metrics That Count: Aligning Human Capital Management to Business Results
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.