What kpi to set hr director. KPI in simple words
KPI is a scorecard by which employers evaluate their employees. It has much in common with the usual planned approach. At the same time, with one major difference: the performance of each individual employee is tied to the overall KPI of the entire organization (such as profit, profitability or capitalization). The purpose of the system is to make sure that the actions of employees from different departments are not contradictory and do not slow down the work of specialists from other departments.
It must be remembered that for each company, the set of KPI indicators can be completely different, just as the global goals and objectives of enterprises will be different.
Also, it is very important to consider the measurability of indicators, therefore, each KPI should be easily measurable.
When building a KPI system for the personnel service, it is necessary to be guided by the following principle: the set of indicators by which the director of the service is evaluated should be as close as possible to the set of key tasks of the unit (ideally, completely coincide with the list of tasks of the unit, reflected in the regulation on the department). At the same time, it is necessary to go from the strategic goals of the company through the business tasks as a whole, concretizing them to the level of the tasks of the unit.
The main goal of the personnel management service is efficient use of the company's personnel. It includes activities for planning, recruitment, selection, adaptation, training, personnel assessment, as well as remuneration, compensation, benefits and labor safety.
Therefore, when building a KPI system for the HR director, you can focus on the following indicators:
selection of personnel in accordance with the deadline set by the company, as well as in accordance with the quality (that is, employees who have passed the probationary period are taken into account);
staff turnover - the ratio of employees who left the organization to the total number of employees;
labor and performance discipline (the number of violations, penalties, the number of dismissed as a result of this);
attestation (the number of those subject to attestation who have passed it);
training and development (number of trainees in the reporting period, budget compliance, plan implementation, quality of training);
motivation (implementation of the company's profit plan as a result of high-quality motivation);
staff assessment according to the schedule;
the state and structure of the personnel reserve, the number of reservists;
labor productivity;
staffing (speed of filling vacancies, the percentage of those who did not pass the probationary period, the cost of hiring one employee);
HR administration.
We pay special attention to personnel records. This is a large area at the intersection of HR and accounting, and here you can focus on the success of labor inspection inspections, as well as the frequency of complaints from employees about the preparation of personnel documentation.
Example of a tree of standards:
Staff turnover (share -3)
Cost of hiring one employee (3 points out of 10; share -1)
Total turnover costs (7 points out of 10; specific gravity -3)
The value (coefficient) of fluidity (8 points out of 10; specific gravity -1)
Time to fill one vacancy (4 points out of 10; share -3)
The term (time) of work of one employee in the company (5 points out of 10; share -2).
Recruitment (share -3)
Vacant period by position (8 points out of 10; share -2)
Passing primary certification by a new employee (4 points out of 10; share -4)
Satisfaction of the immediate supervisor with the employee (2 points out of 10; share -1)
Percentage of turnover of new employees (8 points out of 10; share -1)
Financial losses from low-quality hiring (8 points out of 10; share -3).
Personnel training and development (share -1)
Opportunities for learning and growth (2 points out of 10; share -4)
Opportunities to fill higher-level vacancies as a result of training (3 points out of 10; share -2).
Details in the materials of the System:
- Answer: How to stimulate staff with key performance indicators (KPIs)
General concepts
Key performance indicators (eng. Key Performance Indicators - KPI) - an evaluation system that helps the organization determine the achievement of strategic and operational goals.
Key performance indicators (KPIs) are used to evaluate the work of both the entire organization, its individual departments, and specific employees. With the help of the KPI system, they monitor and evaluate the effectiveness of the tasks assigned to them by employees.
Thus, having developed a remuneration system based on performance indicators, the organization receives a strong tool for employees, which allows you to clearly set goals for the employee and link the results of his work to wages.
There are the following types of key indicators:
Result KPI (how much and what result was produced by an employee, department);
Cost KPI (how many resources were spent on obtaining finished products, services);
KPIs of functioning (performance indicators of business processes (allow to assess the compliance of the process with the required algorithm for its implementation));
Performance KPIs (derived indicators that characterize the ratio between the result obtained and the time spent to obtain it);
Efficiency KPI (derived indicators characterizing the ratio of the result obtained to the cost of resources).
Each organization independently chooses which type of KPI will be used in evaluating the performance of the organization, department and individual employees.
Examples of KPIs and the system for calculating them are presented in.
KPI development rules
In order for the KPI system to be effective, it is necessary to develop such key performance indicators that:
quantitatively easily measurable;
tied to corporate strategic goals, key business processes and organization development projects;
have a calculation formula that is easy for employees to understand;
take into account the area of responsibility of the employee (guarantee that it is with his own work that the employee manages the process of implementing the work plan, external factors do not interfere and do not help to achieve the achievement of indicators);
calculated on the basis of such evaluation criteria and standards that are achievable for the employee (achieving the goal should be associated with the application of significant efforts, but at the same time, the probability of achieving it should be at least 70-80%);
take into account the entire set of functional duties of the employee;
calculated on the basis of such evaluation criteria and norms that the employee can influence throughout the entire time of his work (an employee can improve the result of work at any time);
focus the attention and efforts of the employee on achieving a few high-priority tasks, and do not scatter efforts on many subjects;
balanced with each other (one indicator helps to fulfill the other and does not contradict in its meaning);
carry meaning and are the basis for analyzing the activities of the employee and the organization as a whole.
When developing a KPI system, it is also important to take into account that the cost of measuring an indicator should not exceed the effect of using this indicator, and that a set of performance indicators for each employee (department) should contain the minimum number required to ensure full-fledged business process management (two to four performance indicator for one position).
Development of a KPI system
To develop a system of key performance indicators, it is recommended:
determine the goals of developing and implementing a remuneration system based on KPIs;
determine the goals and strategies of the organization;
identify the organization's overall KPIs, break them down into business process KPIs, and then into departmental KPIs;
determine the list of positions in the structure of the organization to which the system of performance indicators will apply, and the key functions of these positions (business processes that are in their area of responsibility);
based on the key performance indicators of the departments, develop personal indicators for positions, thus linking the general key performance indicators of the organization to the key performance indicators of an individual employee;
determine the procedure for calculating key performance indicators;
fix the rules and norms of the payroll system based on key performance indicators in the organization's regulatory documents (Regulations on remuneration, Regulations on bonuses, etc.), coordinate and approve them with the head of the organization;
explain to employees the rules and norms for evaluating their work with performance indicators, motivate employees to obtain specific work results (KPI achievement).
An example of calculating the salary of a sales manager of the Alpha organization based on key performance indicators
To form a system of remuneration for a sales manager, taking into account the achievement of KPIs, the following methodological procedure was performed:
We determined the main goal of the organization - to increase the implementation of the sales plan in the period from 01/01/2012 to 12/31/2012 by 20 percent.
Determined that this goal is the main goal of the sales department.
It was determined that the salary of a sales manager should take into account the achievement of the goals set for him when performing current tasks.
Since the goals of the sales manager are set by his immediate supervisor and fixed in the sales plan and work plan, the following key performance indicators have been developed.
KPI1 - percentage of sales plan implementation;
KPI2 - percentage of work plan completion.
It was established that each of the selected KPIs equally affects the result of work and that they will equally affect the variable part of the salary, that is, they approved that the weight (importance) of each of the KPIs is 0.5.
We determined the values of the coefficients for each KPI, which affect the size of the variable part of wages at different KPI values, and the meaning of its value. The data was entered into a table.
|
Percentage of performance indicator |
Coefficient |
The meaning of the coefficient |
|
Plan implementation less than 50 percent |
Unacceptable |
|
|
Implementation of the plan 51-89 percent |
Low level |
|
|
Implementation of the plan by 90-100 percent |
Achievement of the target value (implementation of the plan) |
|
|
Plan implementation over 100 percent |
Leadership |
|
|
Implementation of the plan more than 120 percent |
Aggressive leadership or planning accuracy control |
We developed a calculation formula:
Approved the size of the permanent part of the sales manager's salary - 15,000 rubles.
We chose the size of the planned value of the variable part - 15,000 rubles.
Thus, the ratio of the variable and constant part of the salary was determined as 50 to 50 percent.
We determined the formula for calculating the variable part of wages:
We checked all possible salary options for all possible KPI values.
Option 1.
Implementation of the sales plan - 90-100 percent (the value of the KPI coefficient1 = 1). Implementation of the work plan - 90-100 percent (the value of the KPI2 coefficient = 1). The variable part (FC) is 50 percent and is equal to 15,000 rubles.
PerCH = 15,000 rubles. × (1 × 50% + 1 × 50%) = 15,000 rubles.
Salary per month \u003d 15,000 (fixed part) + 15,000 (variable part) \u003d 30,000 rubles.
Conclusion: the employee receives a planned salary established according to the payroll standard.
Option 2.
Fulfillment of the sales plan - more than 100 percent (the value of the KPI coefficient1 = 1.5).
Implementation of the work plan - more than 100 percent (the value of the KPI2 coefficient = 1.5).
PerCH = 15,000 rubles. × (1.5 × 50% + 1.5 × 50%) = 22,500 rubles.
Salary per month \u003d 15,000 (fixed part) + 22,500 (variable part) \u003d 37,500 rubles.
Conclusion: the employee receives 7500 rubles. more than the planned salary, but the implementation of the plan for each of the indicators is more than 100 percent.
Option 3.
Fulfillment of the sales plan - 51-89 percent (the value of the KPI coefficient1 = 0.5). Implementation of the work plan - 51-89 percent (value of the KPI2 coefficient = 0.5).
PerCH = 15,000 rubles. × (0.5 × 50% + 0.5 × 50%) = 7500 rubles.
Salary per month \u003d 15,000 (fixed part) + 7,500 (variable part) \u003d 22,500 rubles.
Conclusion: the employee receives 7500 rubles. less than planned salary.
Option 4.
Fulfillment of the sales plan - less than 50 percent (the value of the KPI coefficient1 = 0). Implementation of the work plan - less than 50 percent (the value of the KPI2 coefficient = 0).
PerCH = 15,000 rubles. × (0 × 50% + 0 × 50%) = 0 rub.
Salary per month \u003d 15,000 (fixed part) + 0 (variable part) \u003d 15,000 rubles.
Conclusion: the employee receives 15,000 rubles. less, since the variable part is 0 due to the implementation of the plan for each indicator is less than 50 percent.
After checking all options for calculating the salary of the sales manager, the salary scheme was agreed and approved by the CEO of the Alpha organization. The employee was explained the rules for calculating his variable part of the salary, and a conversation was held to encourage the employee to achieve a specific result - the implementation of the sales plan and the work plan.
Pros and cons of the KPI system
The advantages of the system of key performance indicators include the following facts:
the size of the variable part of the employee's remuneration directly depends on the fulfillment of his personal KPIs;
each is responsible for a specific area of work;
the employee sees his contribution to the achievement of the overall goal of the organization.
The disadvantages of the KPI system include the following facts:
due to too many KPIs (more than five) in the total amount of the variable part, the share of each of them is small;
too much weight of one of the indicators leads to distortions in the work;
Realistically unattainable KPIs demotivate employees.
Inna Varfolomeeva,
General Director of the System Consulting Center "Formula Management", management consultant, business coach and coach, Ph.D.
We set KPI for ourselves - HR Director. 6 indicators that are easy to measure and meet business goals
Indicators in some areas of work in the textile complex began to decline. We checked the motivation system. It is not only not worse than at other enterprises in the industry, but even better. In addition, managers at all levels claim that their subordinates work with full dedication. In order to continue to more specifically judge who works and how, the owners decided to introduce KPI for all employees, including the CEO. It turns out that the HR director must develop KPI for himself.
What are the key indicators to set for yourself? After all, they will subsequently evaluate your work and involuntarily transpose this assessment to the entire HR department * . And of course, among your key indicators should be those that characterize the work of the HR department as a whole. But not only. You also need to develop such KPIs that would reflect your personal achievements. Enter objective and easily measurable indicators.
Should one or more KPIs be linked to the results of the entire company?
It depends on whether you influence business indicators. The actual powers of the Director of Human Resources in different companies can vary significantly. Somewhere he is a business partner involved in the development of the company's development strategy, actually working on projects to optimize production processes, and somewhere he is only engaged in operational work, carrying out the instructions of other top managers. Unfortunately, not everything depends on us. Much is determined by the owners of the business. So, setting KPIs for yourself that characterize the work of the company as a whole is worth it only if you in the company can directly influence the achievement of general corporate goals.
It is not necessary to set only common KPIs!
In an automotive electronics business, one of the divisions needed to be 100% staffed. A special KPI was set for the HR director: the number of man-days during which vacancies remained open. In an effort to reduce this indicator to zero, the HR director managed to structure the work in such a way that he always knew in advance about the intention of any employee to quit. And his subordinates - recruitment managers - always had several resumes from candidates who could immediately take the vacant position.
In a large retail chain selling household chemicals, the HR Director is on the board of directors and participates in the development of a business strategy. In addition, the HR department has a special account for the management, as it is designed to control staff turnover, which, as you know, is always quite high in trade. It depends on the work of the department whether vacancies in old stores will be filled in time and the staff in new ones will be staffed, whether it will be possible to motivate the team to increase sales and fulfill the plan. Therefore, the main part of the quarterly and 100% of the annual bonus of the Director of Human Resources are tied directly to corporate-wide KPIs (see table below). And only 40% of the quarterly bonus depends on an individual indicator - the fulfillment of current tasks agreed with the CEO.
Develop a company goal map and build on it by defining KPIs
In this case, you will need the help of top managers, with whom you will conduct something like a brainstorming session and outline the main goals of the company. Enlist the support of the CEO: tell him in advance that you want to arrange such a brainstorm, explain why. Its results will be needed to develop KPI not only for the HR Director, but also for other managers, as well as for all employees of the company.
The goal map consists of four steps (levels). When you bring top managers together for a meeting, first work with them on the first step. Ask what are the company's key financial goals for the coming year. It is necessary to name from one to three goals. As a rule, top managers have an idea about such long-term tasks. What top managers tell you, write it down on the board.
After that, move on to the next step. Ask the participants in the brainstorming session to think about what the company needs to change in the behavior in the market, in interaction with customers, in order to get the financial results that are required. Write down the answers, then discuss them and choose the three to five most important.
Now, the third step. Ask a new question: “How should internal business processes be redesigned and improved so that the company can achieve the goals that were just formulated? That is, to take the right place in the market, to interest and retain customers.” Use the answers given to form the third stage of the goal map.
And finally, the fourth step. Ask the audience to think about what needs to be improved in the company in terms of personnel performance in order to properly redesign business processes, better meet customer needs, and ultimately achieve the required financial results. Write down the answers, discuss them and choose a few key goals that will be included in the last, fourth step of the map.
Table. KPI of the Human Resources Director of a trading company
A good KPI for an HR director - unused vacations of employees
Maria SHIPOVALOVA,
Head of the HR/Payroll Division of the Real Hypermarket Chain
This is a very simple indicator, it is easy to measure. It will show whether the HR department and its head are working effectively. After all, if people do not go on vacation, it means that either the work in their structural unit is not built correctly, or there is no one to replace them. Then you need to analyze why this situation has developed, and eliminate the causes of this. Perhaps the HR department does not close vacancies on time and needs to be fixed. Or managers simply do not let their subordinates rest. And then the HR Director needs to sound the alarm, convincing them that there is a risk of employee burnout at work. Maybe you should send managers to time management training? Do not forget that if employees do not go on vacation, the amount that the company has to pay in case of dismissal is constantly growing. And this worsens the performance of risk management.
The development of a strategic map for the next year in the TETRA Electric group of companies usually begins in August. This map not only lists all four groups of goals, but also indicates the positions of top managers who are responsible for achieving them. One of them is the Director of Human Resources Management and Development. In particular, for 2010-2011 the company was faced with the task of increasing profitability, which was to be expressed in an increase in EBITDA (income before taxes). Based on this, a goal map was developed. For the HR director, two global tasks were formulated: to introduce a system of continuous development of employees and increase the efficiency of personnel.
Thanks to the goal map, you will clearly understand which areas of work you need to focus on for the HR department and for you personally. Deciding which metrics to use as your KPIs will be much easier.
Two indicators were included in the list of KPIs of the director of personnel management and development, corresponding to the goal "Introduce a system of continuous development of employees to create a self-learning organization." The first indicator is the cost of training one employee. It characterizes the level of investment in personnel development and is calculated by the formula: Total costs for training and advanced training / Average headcount. The second indicator is the execution of the training budget. It reflects the accuracy of cost planning and is calculated using the formula: Actual Total Training Cost / Planned Total Training Cost × 100%. With the help of these KPIs, HR directors were motivated to ensure that a training and development program was developed and implemented in the right amount, but at the same time, at a cost that was within the budget.
The HR director is responsible for the performance of the business. Implement two types of KPIs
Oksana KOLESOVA,
HR Director, JSCB ROSSIYSKY CAPITAL (OJSC)
Any business is made by people, so the HR director is responsible for the company's targets along with the financial director, business director and other top managers. In financial companies, as a rule, two types of KPIs are set for HR directors. The first one is common for all top management: the company's profit, the volume of the loan (credit) portfolio for the year. The second type of KPI is purely for the HR manager, namely: labor costs within the budget, staff turnover rate, recruiting efficiency in terms of speed and vacancy closure rate, training efficiency and employee qualification level, adaptation management, loyalty level, structure balance. The latter indicator was estimated by the ratio in percentage of the number of employees of the central office and regional divisions, as well as by the ratio of the number of employees of the business category and service units.
Choose the most problematic area in HR work, set goals for yourself and reflect them in the number of KPIs
Start not from the strategic objectives formulated by higher management or the owner (as in the targeted approach), but from the need to ensure the quality performance of HR functions. Determine which part of the job is the most problematic. Concentrate your attention on it. Decide what indicators best characterize his condition, think about what level you need to raise them to, and set this level as a KPI.
In a large car dealership network, staff turnover has increased. The HR director wanted to set himself such a KPI: figure out what the reasons are and solve this problem. However, when he took a closer look at the statistics on layoffs, he came to the conclusion that their jump occurred only among young employees who have worked in the company for one to two years. Therefore, the HR director decided to narrow down his task and set another annual KPI: “Church among staff who have worked from one to two years does not exceed 7.5%.” Now it has increased and is 9%. KPI is tied to an annual bonus (40%). During the year, it was possible to identify and eliminate the reasons due to which, in fact, the turnover increased. The main problem is the unfair bonus system. The number of layoffs has decreased, and the HR director has received a well-deserved bonus.
Now let's look at a few specific KPIs suitable for an HR director.
Indicator 1. Is the staff budget exceeded?
This indicator will demonstrate whether the HR director observes budgetary discipline, whether he manages to correctly forecast personnel costs (including payroll) and then stick to them, whether he knows how to save money. As you can see from the chart below, this indicator is popular and is almost always used in companies where the work of the HR director and his subordinates is evaluated using KPIs. It is calculated like this:
C b \u003d Z f / Z p x 100 (%), where:
C b - indicator of compliance with the budget;
З f - actual personnel costs;
З n - planned personnel costs (according to the budget).
Diagram. What KPIs do companies use for executives and HR employees?
Metric 2: What is the financial return on staff costs?
Use this metric to understand whether the HR budget is being used effectively and whether the company is getting the financial return it expects from paying its employees. You can check this, for example, using the following formula:
Using this formula, you will find out how many products the company produces for every ruble spent on staff. You can adjust the calculation formula, taking into account the specifics of your company and the industry in which it operates. So, for trading companies, the indicator will sound differently: the amount of revenue per 1 ruble of staff costs. And it is calculated in the same way. If, in your company, an HR director has the ability to significantly influence production or sales costs, then it is better for him to set a KPI that will be tied to gross profit. The calculation formula will be:
E and \u003d O p / Z f, where:
E and - an indicator of the effectiveness of investments in personnel;
О n is the volume of production (in monetary terms);
З f - actual personnel costs.
The higher this figure, the better. Values can vary greatly depending on the specifics of the activity.
Indicator 3. What is labor productivity
In other words, you find out how much production falls on one employee. The higher this figure, the better. This means that employees are properly selected, trained and motivated. In addition, this KPI will also stimulate HR directors to better monitor the number of staff. After all, the creation of new jobs should always lead to an increase in output, and, consequently, an increase in labor productivity. Otherwise, the increase in the number of personnel is not economically justified, and this cannot be tolerated. Labor productivity is calculated as follows:
P t \u003d O p / T s, where:
P t - indicator of labor productivity;
O n is the volume of production (in monetary or commodity terms);
T s - labor costs (in man-hours or man-days).
For ease of calculation, you can replace labor costs with the average number of employees, assuming that all employees worked in the company for approximately the same number of person-days during the period under consideration.
When setting KPIs, proceed from the HR strategy. Don't Forget About HR Brand and Staff Service Effectiveness
Irina BARANOVA,
HR Director of the Gulkevichi Starch Plant (Gulkevichi, Krasnodar Territory)
Of course, the HR strategy is developed jointly with the first person of the company. Based on this document, you can easily select such KPIs for yourself that correspond to the company's goals. Of course, we cannot do without indicators for recruitment, training and development of employees, and compliance with the size of the payroll. But set larger KPIs as well. For example, the formation of an HR brand and an overall assessment of the effectiveness of the HR service. An HR brand can be judged by such data as the number of candidates from donor companies and competitor companies, compliance with internal communication standards, employee satisfaction index. And about the efficiency of the HR service - by the fact that the planned budget of the service is not exceeded, whether HR processes are optimized.
Indicator 4. What happens to employee turnover
Is this indicator decreasing or, conversely, employees began to actively quit and it is already higher than planned. Since the desire of people to leave the company depends on many different factors related to personnel management, staff turnover, in fact, characterizes the quality of all personnel work, that is, it allows you to evaluate the work of an HR director in a complex. Recall the calculation formula:
T k \u003d C y / C o x 100 (%), where:
T to - an indicator of staff turnover;
C y - the number of dismissed employees;
C about - the total average number of employees.
As mentioned above, this indicator can be adjusted if problems with turnover are observed only with certain categories of personnel and you are trying to solve this issue.
Indicator 5. How high is the rate of absenteeism
Absenteeism is the absence of employees in their places during working hours. And it doesn’t matter for what reason - for a good reason or because of absenteeism. A high value of this indicator will indicate that the staff does not strive to fulfill their duties and is constantly looking for reasons not to appear at the workplace. Most likely, an unfavorable atmosphere has developed in the team, there are problems with other hygienic labor factors, or the motivation system is not working effectively and this needs to be corrected. To calculate the absenteeism rate, use the formula:
A p \u003d D or / D about x 100 (%), where:
And p - an indicator of absenteeism among the staff;
Dor - the number of man-days of absence from work;
D about - the total number of man-days in the period under review.
Indicator 6. Are employees satisfied with their work?
You can find out with a survey. It makes sense to conduct it no more than once a year, since the opinion of the staff about the company does not change quickly. This KPI can only be annual or even two or three years. The calculation formula is as follows:
L p \u003d C l / C about x 100 (%), where:
L p - indicator of staff loyalty;
C l - the number of loyal employees (according to the results of the survey);
C o is the total number of interviewed employees.
* What KPIs to set for HR managers responsible for various areas, read in the appendix to No. 3, 2012 "KPI for HR employees".
KSS "Personnel System"
The editors of the Kadrovoe Delo magazine found out which habits of personnel officers take a lot of time, but are almost useless. And some of them may even cause bewilderment in the GIT inspector.
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If you pay vacation pay a day later than the deadline, the company will be fined 50,000 rubles. Reduce the notice period for the reduction by at least a day - the court will reinstate the employee at work. We have studied court practice and prepared safe recommendations for you.
Today, many private companies and organizations have approved and implemented KPIs for the HR department. However, there are new companies or organizations with outdated, established principles that have not switched to modern ways of evaluating the work of HR specialists. When building a general KPI system for the personnel department, it must be taken into account that the KPI of the head of the department may be similar to the KPI of subordinates. At the same time, it is necessary to take into account the strategic goals of the company, the overall business objectives and what role the HR department plays in achieving them.
To put it bluntly, this unit has a decisive role in achieving the overall goals of the organization. After all, it is here that the recruitment of future employees takes place, personnel are selected here, who will subsequently work for the overall result of the company. KPI of the HR director should include indicators that characterize the degree of effective involvement of all specialists in the organization in the workflow. These are measures for planning, selecting and hiring specialists for work, training for work, giving a competent, objective assessment of personnel, wages, compensations, benefits and labor safety.
KPI of the personnel manager in each individual organization must be individual. However, most often they consist of staff turnover (the ratio of specialists laid off to the total number of people working in the company), the total number of employees, staffing levels, costs associated with the registration of new employees, etc. All these indicators can be expressed in digital terms, in addition, they affect the successful operation of any organization.
The KPI of a training manager should not consist of the number of seminars and trainings conducted, but of the results obtained, for example, an increase in the number of deals concluded after a sales training, an increase in the average check in a store, a decrease in staff turnover, an increase in the number of employees who have passed certification, etc. KPIs of the training department should be expressed in numerical terms, just like the general KPIs for all specialists in the organization. You can conduct various trainings every day, which will not give any result, but at the same time the specialist will have a high KPI, which is expressed in the total number of seminars and trainings conducted per month. But if you take as a basis the result of passing the training, the degree of assimilation of information and its application in practice, then the benefit for the company from this indicator can be enormous.
The general climate in the team depends on how competently and professionally the KPIs of the personnel services are developed, how much specialists value their work, what new faces come to the organization, etc.
To evaluate the work of a manager, you can implement a system such as KPI in a company. It has already proven itself well in the West and has been successfully used in Russia for several years now. The system can be used in small, medium and large businesses. With its help, you can identify the weak links in the company's work and build a long-term development strategy. The work of top managers is one of the most important components of success, and we will look at how the KPI of a leader is measured.
Some Features
It is important that the tasks assigned to the manager be realistically fulfilled. If the requirements are too high, then the manager can simply give up immediately. To accurately assess the achievements of the leader, you need to take a time period equal to one year. This is the optimal period for which the employee can prove himself and achieve improvements in performance. It is best to combine personal indicators with general ones, so the picture will be much more objective. General indicators are those data that the department shows. And, the higher the level of a manager, the more important it is the general indicators for evaluating his work.
KPIs are always specific values expressed in numbers. But you should not take a lot of indicators at once, otherwise the result will be blurry. It is best to focus on 5 indicators - this number is optimal, according to experts.
Achievement levels
For the top management, certain levels of achievement are established:
- The minimum threshold below which bonuses are no longer accrued.
- Target - a bar for paying out bonus money.
- Exceeding. If the manager exceeds the target threshold, then he is awarded an increased bonus as an incentive.
For the head of the department, indicators can be, for example, as follows:
- How the plan is carried out.
- How the reporting on documents is observed and discipline is maintained in the department.
- How efficient are employees.
Moreover, for the heads of different departments, their own performance indicators should be set, which correspond to the direction of the work of the unit. For example, some managers are engaged in personnel, while others are in sales. For these people, of course, the indicators will differ.
Eventually
The well-being of the entire company depends on the effectiveness of the work of top managers. Therefore, it is beneficial for the owner to introduce a KPI system in order to monitor the work of their managers and identify all their shortcomings. From this we conclude that the KPI of the project manager is a very important thing.
Today, key performance indicators are a powerful tool for assessing the performance of the entire company and the HR department in particular. Let's consider how to describe the general KPI system for HR departments and determine possible options for its application, depending on the adopted personnel management strategy.
Criteria for evaluation
According to the study, the most common KPIs for HR departments of domestic companies are: fulfillment of the staff budget (used by 84.5% of companies), turnover (83.3%), quantitative and qualitative staffing, compliance with the requirements for maintaining personnel records ( 86.9%). There are a number of other indicators that describe various aspects of the personnel management function. Each of them will be “good” and “necessary” in its own way, and perhaps there is such an HR function for which it is difficult to set an indicator. In this case, the development of a specific strategy for human resource management will help to form a system of key performance indicators for a particular company. And the supporting material will be the general KPI system for the personnel service, which establishes a connection between specific actions for personnel management and objective performance indicators.
HR-KPI system
The starting point in building a coherent system of HR metrics is to identify two types of indicators:
1. Characterizing the effectiveness of the use of human resources. They are a kind of reporting to the owners of the company and are aimed at reflecting financial performance, which in its simplest form can be expressed in terms of the ratio of the level of personnel costs and productivity (for example, "personnel costs as a percentage of revenue"). Thus, these indicators answer the question of the owners "What do we get by investing in personnel?".
In order to control and optimize overall HR costs, more detailed monitoring is needed. For this purpose, indicators such as “costs for filling one vacancy”, “average cost of an hour of training”, “costs for training one employee”, “payroll costs as a percentage of personnel costs”, etc. are used.
2. Characterizing the effectiveness of the HR service. They are more extensive, since they characterize the effectiveness of the use of HR tools (that is, operational activities). Information on such indicators is of most interest to heads of HR departments or top managers in charge of the HR function, as well as to CEOs.
Indicators of this type can be expressed through three fundamental tasks of the company's HR service: selection and promotion, education and development, motivation. To do this, it is necessary to isolate subtasks for each function.
Recruitment and promotion
This function is evaluated in several ways.
1. Attractiveness of the company to potential candidates. In order for an organization to successfully cope with the selection and promotion of employees, it must have an appropriate attractiveness for potential candidates. At first glance, the most relevant way to assess the attractiveness of a company involves the involvement of external sources (through a sociological survey, participation in independent ratings, etc.). You can also evaluate the attractiveness on your own, based on the information available. There are quite objective indicators for this:
- candidate activity(for example, “competition for a place”, “number of responses to a vacancy”, etc.). This indicator is easy to measure on your own, without resorting to the services of external providers;
- information from employees. Satisfaction surveys allow you to see the company through the eyes of its own staff, including in matters relating to attractiveness (salary level, social security, working conditions, etc.);
- offer competitiveness. We are talking about both the level of wages in relation to the market, and the comparability of social benefits. For example, you can formulate this in the form of KPI "salary at the level of the 75th percentile" (less than which - 75% of offers in the personnel market).
2. Selection of candidates. To solve this problem, you need a sufficient number of recruiters (in the language of KPI - “the number of vacancies per one recruiter”).
The next factor in the effectiveness of this area of work is "the presence of clear selection criteria." It is necessary to take into account both the number of positions in relation to which the requirements apply, and how often they are applied. Thus, this indicator can be assessed in terms of "yes" / "no" and quantitatively. Since the selection is carried out not only among external candidates, but also among employees, it is possible to assess the quality of requirements (their clarity, accessibility) by interviewing members of the labor collective.
In addition, for effective selection, it is important to have methods that allow you to evaluate candidates according to the developed criteria, as well as the percentage of use of these methods (that is, “the percentage of employees hired from outside as a result of the assessment”). Such double control is necessary to identify situations where, for example, specially designed tests are provided for certain positions in the company, but they are not applied (the percentage of use is estimated).
The quality of selection can also be assessed by the indicator “staff turnover in the first three months of work”. It can be used to judge how correctly the candidate's expectations regarding work in the company were formed during the selection process. Also often used is the “first-year turnover” indicator, which reflects both the quality of the selection and the quality of the adaptation.
3. Efficient personnel reserve (CR). It is one of the most popular tools for effectively managing recruitment. The quality of training of the RC and the effectiveness of its functioning can be described through a number of indicators:
- prevalence(“percentage of positions for which there is a reserve”; “percentage of employees in the Kyrgyz Republic”);
- performance of the CD(“percentage of vacancies filled by reservists”).
- quality of selection of reservists(“percentage of employees enrolled in the reserve based on the results of the assessment”);
- reserve preparation quality(“percentage of reservists with an individual development plan”; “average hours of training per reservist compared to the number of hours of training of a non-reserve”);
- Ultimately, the effectiveness of the reserve is determined by whether vacancies are closed due to it or not. In Russian practice, unfortunately, there are situations when a company stops at assessing the “prevalence”, at best, also the “quality of selection and training of reservists”. While the meaning of the existence of the reserve is precisely in its demand.
4. Quality and speed of filling vacancies. Essentially, it is about recruitment efficiency.
It is logical if the quality of closing a vacancy will be assessed by the customer - the manager who submitted the application for selection. There is another way - post factum evaluation. Here, indicators such as “the percentage of dismissed at the initiative of the employer” (due to non-compliance), “the average assessment of the effectiveness of employees based on the results of the probationary period” are used.
Velocity metrics include “vacancy closure rate”, “number of vacancies filled by one recruiter”, and “percentage of vacancies filled”. They are extremely important for the activities of the HR service, since they speak not only about the effectiveness of search and selection methods, but also about how much time must be allowed for filling vacancies in order to fulfill business plans.
Education and development
For a more complete description of KPIs in the field of training, one should focus on the “grow from within” strategy, when a lot of attention is paid to employee training. The set of key performance indicators in this area is most logically described through three subtasks.1. Planning. Any well-built training system begins with it. Planning is carried out on the basis of a “training needs assessment”. To collect information about training needs, some companies use surveys of employees and their managers. This method is quite capable in relation to vocational training. To plan programs that develop the personal competence of an employee, more objective assessment methods are needed, for example, an assessment center.
The first indicator to measure the effectiveness of training and development is the “percentage of employees who regularly undergo competency assessments”. But one assessment is not enough, it is necessary that it be translated into action. The “percentage of training programs planned based on the results of the assessment” is used as the corresponding indicator.
2. Ensuring sufficient training. Control is possible by coverage indicators:
training coverage (“percentage of employees who received training during the year”);
actual volume of training (“number of hours of training per employee”).
It is clear that far from any training will be developing. There is also compulsory education, regulated by state-established norms and standards. If most of the training used in the company is mandatory, it is obvious that the organization only fulfills formal requirements, but does not engage in development. To track such trends, we use the indicator “percentage of compulsory education”.
To adjust the process, it is necessary to additionally assess who and in what departments is studying.
3. Ensuring the necessary quality of education. As a rule, quality is assessed by questioning trainees immediately after classes (an assessment of knowledge and satisfaction is revealed) and, after some time, a survey of their leaders is conducted.
Motivation
The system of motivation in attracting employees is directly related to the attractiveness of the company as an employer. But its most important tasks are to stimulate specialists to achieve and keep key people in the company.
1. Stimulation of employees for new achievements. Here, many use variable remuneration as a tool. Its impact can be assessed by a simple ratio of the share of variable remuneration to the total.
The first condition for the performance of the incentive system is an assessment of achievements, on the basis of which a variable part can be paid (the indicator is “the percentage of employees who regularly receive an assessment of their performance”). The second condition is that adequate decisions should be made on the basis of this assessment. In practice, this means that if the employee has achieved the goals, then his remuneration should be significantly different from the level of "NON-achievement". The indicator “the difference between the income of high- and low-performing employees” helps to evaluate this.
2. Retention of key employees. One of the most common indicators among Russian companies is "staff turnover". In general terms, it reflects the effectiveness of various HR functions. To use this indicator to evaluate the effectiveness of employee satisfaction management, it needs to be refined. Namely: to formulate as “the percentage of employees who left the organization of their own free will” (meaning not a formal dismissal under the article, but the real reason for leaving). This indicator reflects, on the one hand, the satisfaction of people with their work, and on the other hand, the company's ability to retain them. But, trying to keep all the employees, the company runs the risk of wasting resources without achieving the desired result. Therefore, it is necessary to identify key categories of employees and monitor indicators for these categories (for example, "turnover among HiPos - people with high potential").
The turnover rate indicator allows you to look at the situation in retrospect. But effective management requires information that can be used to make predictions and take preventive action, especially when it comes to the likelihood of key workers leaving. Obtaining such information in numbers is possible with the help of a survey of employees regarding their satisfaction. Thus, the KPI “employee satisfaction level” will be revealed (including on individual issues).
From HR strategy to key performance indicators
The basis for building a KPI scheme for the HR service in a particular company is its HR strategy. Formulating an HR strategy is a laborious process: it is necessary to take into account not only the company's business strategy, but also the image of the company as an employer, the attitudes of the first person and the top management team, and, of course, the specifics of the labor market. However, it's worth it. Thanks to the HR strategy, it becomes possible to form a limited set of KPIs, which, on the one hand, will be sufficient to measure performance, and on the other hand, will not require excessive costs.
What does it look like in practice? Let's take the Kaplan and Norton model as an example.
Using these indicators, according to Kaplan and Norton, you can align the goals of each employee, business unit and the entire enterprise, identify new positive initiatives and processes. |
According to them, one of the business strategies is "Proximity to customers". Transforming it into an HR strategy (of course, in a generalized version, without taking into account the specifics of a particular labor market, etc.), we get four key imperatives (unconditional rules):
The staff is the source of the company's profit.
The HR goal is to ensure the availability of qualified personnel that translates the company's culture.
The company is ready to invest in the development of its people.
Employees are rewarded for competence, not for achieving goals.
Based on these imperatives, indicators are formulated. Consider them using the example of the HR function "Selection and promotion" ( drawing.). The red color marks the indicators included in the KPI system for the HR service of the conditional company).
As can be seen from the figure, from the point of view of personnel strategy, not all indicators have become key. Many of those that at first glance seemed important were not included in the final list (for example, “speed of vacancy closing”, “number of vacancies filled by one recruiter”, which are characteristic of the “cost leadership” strategy).
passed in Moscow Forum HR Management in Contact Center dedicated to the issues of work with personnel, starting from the control of the effectiveness of the selection of employees and ending with the latest strategies for personnel management.
The representative of the company acted as a speaker at the event Teleperformance Russia&Ukraine, head of recruitment and development department of the company Anna Ovchinnikova, she told the forum participants about the basic principles for evaluating the performance and motivation of recruiters involved in recruiting personnel for contact centers. At Teleperformance, a global leader in outsourced multi-channel customer experience management services, with a total workforce of 182,000 employees, the primary focus of the HR department is quality recruitment within a limited time frame.
In her report, Anna Ovchinnikova spoke about the methods adopted by Teleperfomance for evaluating the effectiveness of recruiters and the principles of their motivation.
So, the main concept that is used when evaluating the performance of an entire service or an individual employee is Key Performance Indicators, (KPI), which translates as “key performance indicators”.
There are several main KPIs for evaluating the effectiveness of the recruitment department:
First- the quality of selection, which is the ratio of employed employees 90 days after employment to the number of employed per month.
Second KPI- the productivity of new employees, calculated as the ratio of new employees who achieve the main KPIs to the number of recently employed.
Third indicator- the level of employee satisfaction, that is, the results of an external study of job satisfaction of recently employed recruiters.
Fourth KPI- staff turnover, the percentage of dismissed employees per month to their total number in the company. If this indicator is low, then the recruiting department is working effectively.
Next KPI- the cost of recruiting employees, the ratio of costs per to the total number of employed. The recruiting department should also work on reducing the value of this KPI.
Another significant performance indicator– compliance with the recruitment deadlines, showing how quickly recruiters can meet the company's need for personnel.
For more convenient and effective control over the work of the department, you can choose team and individual KPIs and combine them
A good example of this combination is Teleperfomance's method of tracking the so-called "quantitative funnel" - the ratio of invitees to interviewees, selected to trainees, on-line, to quits within the first 30/90 days. If we talk about evaluating the skills of recruiters, then quarterly monitoring of the results of their activities and identifying critical mistakes made by specialists at the stage of prescreening and interviews are important. Well-established feedback from employees recently employed through the recruiting department will help here.
Do not forget that an important point in increasing the effectiveness of a recruiter is his motivation. If we talk about the system of material motivation, then, first of all, it is necessary to take into account the volume of selection.
At Teleperfomance, a recruiter's income structure can include up to 45% of the bonus part of payments, depending on the achievement of certain values of certain KPIs, and only 55% will be fixed
The motivation scheme should be focused primarily on the result. As experience shows, it is most effective to set goals within a month, but tasks should be prioritized weekly. An effective model of material motivation assumes that each employee of the recruitment department has up to five personal KPIs, for the implementation of which the variable part of payments will increase. At the same time, each KPI has a certain weight in the total volume. At low rates, a detailed analysis of the recruiter's professional activities for each of the KPIs is necessary.
“With this approach, it is impossible to ignore the methods of non-material incentives for recruiters,- Anna Ovchinnikova, head of the recruitment and training service at Teleperfomance, noted. – Often, internal corporate monthly and annual ratings of the best employees, suggesting the title of "recruiter of the year", training and personnel development programs give a good result - they significantly increase the efficiency of employees. In our company, employees are also involved in project work, business trips, external nominations and awards are carried out. We do not forget about corporate events such as the quarterly HR Summit and the annual HR DAY, as well as many other summits and forums.”
Also in her report, Anna spoke about the prospects for the development of HR in Russia. The main trend is process automation: CRM systems, distribution of video interview methods, interactive platforms with gamification elements and flexible access to them 24/7/365.
At the same time, the main role in improving the overall efficiency of the HR department will continue to be played by a recruiter - a highly effective and well-motivated specialist, who has all the knowledge and skills necessary for professional activities.
