Human Resources
Metrics, Reporting &
Financial
Management
Chapter 9
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Human Resources Metrics, Reporting
& Financial Management - Topics
1.
2.
3.
4.
5.
6.
Data Management
Comprehensive HR Audit
Metrics for HR and HRM
HR Systems
Transforming Data into Actionable Information
Financial Management
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Part 2
Comprehensive HR Audits
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Comprehensive Auditing
• Consulting assessments bolstered by evidence instead of a looser list
of observations that often accompany traditional consulting reports
• Can be conducted for an entire company or only for a department
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Part 3
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HR Metrics
Metrics and Measurement
 HR traditionally has been seen as a non-measurable function
 HR metrics can place human resource issues into a corporate
context, using numbers and money – the language of
business:
□ Cost / benefit projections supporting proposed HR
initiatives
□ Quantitative measures of HR processes [turnover,
absenteeism, etc.]
□ Qualitative analysis of HR processes [job performance,
training]
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Metrics
• Data analysis within HR referred to as metrics
• Set of metrics- group of measurement elements or quantitative
assessments
• Metric- defined analysis of a specific data set- the equation
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Types of Metrics
• Simple metrics- includes figures that focus on operational
effectiveness
• eg. length of time to hire, turnover rates
• Complex metrics- deal with strategic issues
• eg. skills forecasting, ROI of workforce
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Balanced Scorecard: Example of a Strategic HRM Metrics Tool
Key Success Drivers:
1. Financial
Vision
and
Strategy
2. Internal /Operations
3. Learning / Growth
4. Customer
Balanced Scorecard is a management and metrics tool that
organizations can customize to measure and monitor their key
success drivers
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Part 4
Human Resources Systems
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Fundamentals of
HRIM
Section 4.1
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HRIM
• Includes information management in various forms and at all levels
• HRMS- consists of:
•
•
•
•
•
•
Verbal information
Paper based forms
Software applications
Information collected over web
Third party collection
Various storage systems
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Information Systems
Information systems are primarily manual, paper-based
information and electronic automated systems. Today, they
are often but not exclusively software applications
Information managed by HR is not just for the HR department
but is often required by all management regarding the
organization and its employees
For example, information is collected on:
 Employees
 Spouses and partners
 Applicants
 Contractors
 Former employees
 Consultants
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Legislation that Impacts HRIM
• Various legislation in multiple jurisdictions
• Municipal, provincial, federal, international levels of
government
• Broad and specific requirements for information
collection, maintenance, privacy
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Privacy Legislation and HRIM
Information does not need to be recorded in any media to qualify
as “personal information” under Canada’s privacy legislation,
the Personal Information Protection and Electronic Documents Act
(PIPEDA)
Personal information can be oral and does not have to be recorded
anywhere. In addition, “personal information” belongs to the
individual, not the company, employer or union
All HR-related information needs to be managed in a private and
secure environment. HR professionals need to be involved in
establishing clear policies and procedures regarding the
management of HR information
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PIPEDA
• Clear expectations for data collection (before, during, and after)
• Relevant for HR professionals
• Security of information critical
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Types of HR Information
The following table is an example of the types of information that can be
collected by HR
Organization Information
People Information
Units (companies, divisions,
departments, sections, teams)
Names
Organization reporting
rrelationships (org charts)
Contact Address
Jobs & job evaluation
Contact Phone
Positions & position evaluation
Date of Birth (DOB)
Titles
Social Insurance Number (SIN)
Location information
Beneficiaries
Salary ranges
Specific compensation package
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What Comprises An Employee File?
• Basically, everything an organization retains about
an employee, regardless of where the information
is stored
• Having one single employee file is difficult to
maintain
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HR’s Role In Information Management
1. Assess the organization’s use of any current
systems
2. Define current future needs for any systems
3. Select appropriate information system software
4. Integrate business processes, paper (hard) and
electronic (soft) information management tools
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Data Management
Ideally, any one data element should be
collected only once and form the source of the information.
Today, web-based or web designed software facilitates this
process
For example:
1. Applicants may enter their employment application
directly online attaching their resume and other
documents
2. Employee can enroll for benefits online at the office or
in the evening from their homes, if they wish
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Basic Terminology
Interfaces – Programs that allow communication between
two software applications to facilitate data exchange.
Software that is interfaced may be from the same vendor or
different vendors.
Integrated Systems – Designed to not require an interface.
Therefore, the components or modules communicate
between each other. Integrated systems are common,
although not necessarily, from the same vendor.
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Basic Terminology (continued)
Data Warehousing – Common data pool into which data is
placed from various sources
Data Mining – Various tool sets exist to “mine” the data – to
refine, sort, aggregate and report on data from different
sources
Enterprise Directory – Large organizations use enterprise
directories to achieve such goals as a single sign-on (to
multiple software applications and/or networks). Changes are
made to the active directory that in turn authenticates against
other applications
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Workflow
The movement of data and/or forms with data
through one or more business processes
Example:
Performance appraisal form is sent to a manager who
completes a portion, sending it on to the employee who
complete a portion and sends it back to the manager, who
then sends a copy to HR
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HRMS Components
A typical complete HRMS consists of a number of functional
areas, including:
 Staffing (recruit, select, hire, fire, transfer, promote, demote)
 Organization Design (jobs, positions, organization structure, charts
 Compensation (base salary, variable compensation, performance
management, benefits management, payroll management,
pension)
 Training (and development; skills, competencies)
 Employee and labour relations (discipline, grievances)
 Health and Safety (medical tests, accidents, incidents, return to
work)
 Time and Attendance Management (scheduling, absences,
replacements, overtime).
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Acquisition Options – Build or Buy?
Buy


Best of Breed – “the best software in a particular segment” or a
single product line. Software vendor may offer multiple products,
only one of which is best of breed
ERP – Enterprise Resource Planning – vendor offers a number of
different software application packages which are integrated
Build
 Although possible to design and develop, it can be expensive to use
IT resources to build HRIS software
Outsource/Alternate Service Provider
 eg. Payroll outsourcing providers
SaaS
 Software as a Service: Pay as you go model or On Demand
applications
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Trends in Technology
and HRIM
Introduction
Section 4.2
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Trends In Technology and HR Information Systems
 Since late 1990s and the mass business adoption of the
Internet, the way that organizations manage and collect
their HR data has significantly changed. The Internet also
has affected how HRIS vendors create and modify their
existing applications
 Today, the majority of mid to large-sized organizations have a
web presence either over the Internet with a corporate
website, or with the use of an intranet to maintain internal
resources for the organization’s employees
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Human Capital Opportunities For
The Use Of Technology
Opportunity
Key Benefits
Recruitment
Automation
Reduce hiring costs and time to hire, improve quality of hired personnel
Contingent
Workforce
Management
Onboarding
Gain control over contingent labour supply chain, reduce contingent labour
costs
Talent
Management
Utilize resources more effectively by matching skills to staffing
requirements, develop employees for higher performance and retention
Performance
Management
Align individual objectives with corporate goals, fast track top performers,
address employee performance issues through development plans
Incentive
Compensation
Drive productivity through rewards programs, improve employee retention
Employee
Relationship
Management
Reduce administrative process costs, improve employee communication,
productivity, and loyalty
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Make new employees productive faster, improve assimilation and retention
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Data Management Options
Employee Self Service (ESS) – Employees have access
to certain approved modules and information
(typically their own personal information) in the HRIS
Managerial Self Service (MSS) – Managers have
access to certain approved information that
specifically facilitate managerial decision making
Employee Portal - designed to meet employee needs
and different aspects of their lifestyle
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Advantages Of A Web-Based HRMS
Ease of Implementation – Compared to the onerous
implementation costs and timeframes of client-server
technology, web-based access is easier to implement
Cost - There are fewer IT, additional hardware, and
implementation support costs involved with the
implementation of a web-based HRIS
Upgrades - With online applications, upgrades take place
often over the weekend. Customers are notified about the
changes and when they will occur. Employees will come in on
Monday morning and be able to use the new features and
functionality without any work disruptions
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Advantages Of A Web-Based HRMS (continued)
Training - Due to the accessibility of the Internet and the fact that many employees
use the Internet daily, the transition to a browser-based interface is relatively
natural
Reduction of Redundant Work using a Centralized Database – As web-based
HRIS’s are being rolled out, a reduction in redundant work results because
employees and managers have the ability to access and update their own
relevant information
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Disadvantages Of A Web-Based HRMS
Flexibility/ Ease of Modification - With any type of system, one makes a trade-off
between flexibility and cost. There are restrictions to the level of system modifications that
companies can make with online applications
Newness of Technology - Although the technology was developed for adoption in the
mid 1990’s, it is still considered relatively new and organizations are still discovering
challenges associated with the recency of its development
Reporting Capabilities - One of the benefits to a client-server system was the flexibility
and power associated with reporting tools. This benefit has been lost with online
applications due to the “cut, paste and apply” nature of online applications, i.e. in order to
make it as accessible and functional as possible specific customization and adjustments are
unavailable at this time
Interfaces - Interfaces between systems still need work and they aren’t as seamless as
traditional interfaces. Currently, in order to convert files a multi-stage process is necessary: it
must first take the file, convert it to a spreadsheet, and then convert it to another system
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Types Of Companies Best Suited For
Online HRIS Access
Where virtually all employees have a computer and are using the
Internet daily. This makes online HRIS access a natural progression
and will assuredly facilitate any future plans for the rollout of
Employee Self Service
Institutions such as universities that already have similar
technological and communications infrastructure in place, such as
internal email systems. Such institutions can particularly benefit
from leveraging the Internet as they are often under financial
pressures and make the most with their available resources
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Types Of Companies Best Suited For
Online HRIS Access
High tech companies more likely to adopt online applications simply for
familiarity and accessibility reasons. They have higher percentages of employees
using the Internet and all the hard/software tools required are already built into
the system
Multi-site companies may be more apt to use web-based systems mainly due to
the fact that networking a client- server system for a multi-located company can
be extremely onerous and complex. Multi-site companies would be able to take
advantage of the immediate Internet benefits
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Selecting an HRMS
Section 4.3
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Selecting an HRMS
• Business Case or Cost Benefit Analysis
• Critical Success Factors
• Use project management principles
•
•
•
•
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Assess
Define
Select
Implement
Integrate
Communicate
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Transforming Data
into Actionable
Information Reports
Section 5
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Transforming Data into Actionable Information Reports
Emergence of on line information:
• On line reports- standard and ad hoc
• HRMS - Home screen information windows- each user has their own
home page
• Dashboards - graphic representations of information
• See page 455-6 for examples
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Financial
Management
Section 6
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Accounting Equation
• Financial statements - tell us where business stands from a financial
point and how well it is performing
• Most basic measurement - states resources of the business and what
claims there are against those resources
Assets= Liabilities + Owner’s Equity
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Main Financial Statements
• Income Statement
• Balance Sheet
• Cash Flow Statement
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Using Financial Information
Financial information is critical to HR professions for the following
purposes:
• Align HR strategy to Organizational Strategy
•
•
•
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Expansion/ contraction business units
Results of Operations
Future investments such as HRIS
Capital Investment
Human Capital Levels
Total Compensation
Etc.
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Statistics
Section 7
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Statistics
• Statistics - refers to a group of mathematically based
concepts and rules that are used to organize
numerical information in the form of tables, graphs
and charts
• When presented statistically data is transformed
into information, telling a story about the data set
and conditions in which it operates
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Terms
• Review terms on pages 447-450
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