Monitor These six HR Metrics for Better Employee Productivity

Is your HR department operating efficiently? Do your current practices result in better productivity from employees? The majority of HR personnel believe that the answer to these questions is yes, but others in the company often disagree. The key to demonstrating effectiveness on the part of your HR department is to monitor key performance indicators that demonstrate positive results. Increased productivity boosts the bottom line for the business, and that’s the best way to convince management that you’re getting the job done. In addition, showing productivity metrics to employees is an excellent way to encourage better performance.

Let’s take a look at six ways to monitor the productivity of employees and to determine whether your current HR practices are producing the results you want:

1. Compensation—According to the Heritage Foundation, compensation should rise alongside productivity in order to reap the most benefit. Tracking compensation/productivity metrics should show that as employees become more productive, corresponding increases in compensation will reduce turnover while also keeping productivity strong. In addition, compensation increases usually result in greater productivity increases.
2. Training—Track employee productivity in relation to the number of training hours they complete. By demonstrating a positive correlation between training and productivity, you can make a good case for the continuation of current and future training programs.
3. Positive Management—Low-performing employees should show an increase in productivity after interactions with employee relations. If these interactions do not produce positive results, take a look at your program to determine where changes need to be made. Positive management can make a huge difference in employee morale, which in turn affects productivity.
4. Software Usability—If you are running an old or inefficient HRIS system, your productivity will suffer. This metric can be an excellent way to convince management that a new system is needed. After purchasing the new software, before and after comparisons can demonstrate the effectiveness of the new system and provide the support needed for training and future upgrades.
5. Hiring—More efficient hiring methods should result in better quality hires, which will in turn drive an increase in productivity. Shorter vacancy-to-fill time periods, reduced turnover, and better retention rates can all demonstrate the efficiency of your applicant tracking system and/or recruiting methodology.
6. Revenue Per Employee—Employee ROI may be the most convincing argument for the effectiveness of your HR program. By tracking the amount spent on recruiting, hiring, retention, employee relations, and HR costs and comparing that number to the total revenue per employee, you can demonstrate an increase in revenue per employee as processes become more efficient.

By monitoring these six metrics, you can demonstrate whether or not your current HR practices are producing positive results in the daily operations of the business. Many of these metrics depend on an efficient HRIS system both to monitor progress over time and to reduce inefficiencies in your current methodology. They can be used to justify the need for a software purchase or to show positive results from implementation of a new system.

If you are ready for a new HRIS system, our comparison tool can help you choose the best product and vendor for your organization.