Human resource is
fundamental to
organizational strategy, development and progress,
and strategic human resource management is a key and
leading determinant of organizational success. It is equally posted
to capital, land, marketing, finance and operational investments of
the organizations. Human cost may sometimes contribute to half
or more of the company's expenditure but over 57% of the companies
are unaware of this fact. In the globalized world, when the business
processes are outsourced and there is a lot of cross-border assembly of
the products. Strategic Human Resource Management
(Strategic HRM) has taken a lead role to demolish the differences
and parities. HR has a role that goes beyond absenteeism and
turnover statistics to read the productivity, efficiency and effectiveness of
the people. Organizations need to have a clear linkage between
human resource investments and strategic goals in quantifiable terms.
There has to be an established association with business plans and goals.
There are evidences in research that with the use of HR metrics there is a
30% increase in productivity. Linkages which are often comprehended
and articulated, at the highest levels of organizations in phrases such
as "People are our most important asset," "company is made by
people" have to be reflected in the HR measurement systems. It is
the human factor that translates into strategic outcomes for a
company and HR systems must have provisions to acknowledge them.
It has been the traditional role of the HR manager to focus
on administrative efficiency, traditional and
disconnected functional initiatives but the time has come to emphasize on
strategic outcomes. There are thousands of cost-based and ratio-based
measures available (cost per hire, trainee, recruit, employee; number of
HR employees per total employees, etc.) but there has to be some
scientific translations to make them valuable in strategy formulation. HR
metrics is a merger between measurement and Strategic HRM.
Strategic HRM must be backed by frameworks of
measurement drawn on the linkages between human factors and
strategic outcomes for more comprehensive and integrated solutions. There
is an acute requirement to develop a complete inventory of
Strategic HRM measures by identifying the key areas and
fundamental measures. The metrics must be based on strategic perspectives
and must have candid definitions to the measures with their
listed characteristics, in absence of which it can be detrimental to
human resource and strategy both. It must have clear classifications of
past, current and future expectations. This will induce proper
functioning and forecasting. |
