The Evaluation of HR Performance

Abstract

Human resources management is essential to the success of every organization. Efficient functioning of the HR department allows to reduce turnover, improve motivation, and increase workers’ profitability, while at the same time decreasing some of the business costs and retaining talents. The roles of the HR department include a variety of tasks, such as training, development, recruitment, employee relations, and performance review. The HR audit scorecards were filled by three employees and one HR representative. This report aims to evaluate the results of the audit and discuss ways of improving the functions of the HR department in the future.

Introduction

In most companies, HR departments are an essential and irreplaceable source used by managers to improve employee relations and increase the overall profitability of the business. The evaluation of HR performance, thus, becomes important to ensure that the people in the department perform at their best or to outline areas for future improvement. HR audits are conducted on a regular basis to monitor the performance of the department and indicate a need for adjusting the HR strategy.

Evaluating HR Performance

One of the more popular ways to evaluate the performance of the HR department is by using Kirkpatrick’s The Four Levels Evaluation Model. The model was developed by Donald Kirkpatrick in 1994 and is mostly applied to employee training, although general functioning of the department can also be assessed by it (Ikramina & Gustomo, 2014).

The model scores the HR’s performance by four levels: reaction, learning, behavior, and results (Ikramina & Gustomo, 2014). The first level refers to the responses of the employees to the work of HR and can be measured by surveys and focus groups. Learning section of the assessment, on the other hand, evaluates employees’ performance or knowledge obtained in training. Level three concentrates on the behavior of HR and their relations to the employees, as assessed by a supervisor, auditor, or self-report. Finally, the ‘results’ section of the assessment evaluates HR’s contribution to the company, either by utilizing bottom-line measures or by human resource accounting.

HR accounting is also frequently used independently of other methods to assess whether the results of HR’s work are indeed valuable to the organization (Singh, 2011). There are two ways in which this method can be applied to HR performance appraisal. First, HR accounting can be applied to the HR department only to analyze the effectiveness of strategy and return on investment (Singh, 2011). On the other hand, considering that the ultimate goal of the HR department is to ensure a stable workforce that contributes to the company’s profitability, the firm’s overall human resources can be accounted to determine whether all employees work efficiently to achieve the company’s goals.

Survey Results

The evaluation performed at the company utilized another assessment method, called HR metrics evaluation. The survey consisted of two sections with 14 HR functions in each and evaluated both the current execution of the roles and areas for improvement. The results of the first section survey were good overall, with average score at 4 (very effective) for 11 out of the 13 functions, since the ‘other’ domain was not assessed by the participants.

The two functions where HR roles were not useful were employee relations and internal communication/mission and goals. A similar picture can be seen in the second section of the survey, where another area has been marked as in need of improvement: training and development of employees. The three parts received ‘very important’ score from all the participants, whereas the rest of the domains were marked either ‘somewhat important’ or ‘minimally important.’

Conclusion: Future Improvement

Overall, the survey assessed some of the most relevant HR metrics, such as recruitment and hiring processes, communication, and employee relations (Van Vulpen, 2016). The use of appropriate metrics in the scorecard makes the audit useful for determining further course of action. In general, the results indicate the need for improved organizational climate and culture, as all of the domains outlined by the respondents as being ineffective and needing attention contribute to the company’s climate. Building a positive work culture is an effective method to increase workforce productivity, promote retention, and improve employee relations (Seppala & Cameron, 2015).

However, a thorough strategy has to be determined to improve the current situation. For instance, more training and development opportunities could be provided to employees, which would fulfill their need for growth and increase motivation. Also, the organizations’ mission and goals can be reviewed and communicated to all staff to raise the feelings of belonging and contributing to a larger goal. According to Seppala and Cameron (2015) revising the corporate culture in order to make it more positive can also attract new talents into the company, who can potentially have a great impact on the organization. All things considered, I believe that focusing on improving HR strategy in the areas that were outlined by the audit can potentially improve the company’s profitability by addressing the core of its productivity – workers.

References

Ikramina, F., & Gustomo, A. (2014). Analysis of training and evaluation processes using Kirkpatrick’s training evaluation model at Pt. Bank Tabungan Negara. Journal of Business and Management, 3(1), 102-111.

Seppala, E., & Cameron, K. (2015, December 1). Proof that positive work cultures are more productive. Harvard Business Review.

Singh, K. J. (2011). What are the modern methods of performance appraisal? MBA Official.

Van Vulpen, E. (2016). 14 HR metrics examples.