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Measuring the Performance and Impact of HR

October 26, 2021 | By Linda Pophal

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HR is a profession that has long suffered from a lack of appreciation, something that Harvard Business Review pointed out way back in 1998. It’s a reputation that has followed the profession into the 21st century. Yet that may be changing.

The value of HR has perhaps never been so impactfully demonstrated as during the pandemic. Suddenly, HR is a function whose value can’t be ignored.

As John M. Bremen, managing director of human capital and benefits at Willis Tower Watson told SHRM: “The week that trillions of dollars of market value came out of the global economy because people could not work and consume and live normally—that really ended any debate over the value of HR to the enterprise.”

But HR professionals need to ride that wave into the future that lies beyond the pandemic.

Quantifying the Value of HR

One of the challenges facing HR has traditionally been the inability to accurately convey their data in a meaningful way—a way that resonates with the C-suite. There may be general agreement that employee engagement is important, but the question remains: how much is it worth? If engagement declines by five percent will a company feel the pain? How much pain will it feel?

These aren’t easy questions to answer and, by and large, they’ve gone unanswered as HR professionals simply continue to try to do their best to prove their value to the organizations they serve.

Until now.

Recently Marcus Buckingham, head of people and performance research at the ADP Research Institute, and a team of researchers, have attempted to answer through the creation of an HR Xperience Score (HRXPS) metric that they’re hoping will become an industry standard.

About the Research

ADP’s research was conducted across 25 countries and is based on the input of more than 32,000 respondents who provided their insights on the importance of HR based on key interactions along the employee journey. The HRXPS measures HR impact in three areas: value-promoting, value-performing, and value-detracting. It’s a metric that is measured through the lens of the employee experience.

The results reveal the key factors that directly correlate to a strong talent brand. Some key takeaways:

  • A single point of contact influences HRXPS. Employees are twice as likely to value their company when they experience a single point of contact with HR.
  • Frequency of interactions matter. Employees are 7.4 times more likely to say HR is Value-Promoting when they experience seven interactions with HR compared to no interactions.
  • HR services directly deliver a higher HRXPS. The more HR services an employee uses, the higher the HRXPS; employees who use five services are 11 times more likely to say HR is value-promoting.

It is the employee’s interactions with HR that most influence the HRXPS metric—including both the quality and frequency of those interactions—and who they have those interactions with, ideally a single individual.

Importantly, especially in today’s widely touted era of employee discontent and a predicted mass exodus over the next several months, the study also indicates the drivers most likely to influence an employee’s intent to leave their organization, as well as what influences them to actually leave.

Implications for HR

Buckingham was born to the work, almost literally. Both his father and grandfather were HR practitioners, he says. And both faced experiences similar to many of their colleagues: “mucking around in HR with no measure of HR effectiveness.” The HRXPS metric can change all that, he says, and he has some advice to offer HR practitioners.

First he says, the first thing HR needs to resolve is “whether or not you want to have accountability.” There are other metrics, of course, that HR has traditionally measured—like voluntary turnover, lost workdays, etc. But never before a metric that is an actual reflection of employee sentiment.

Then, he suggests focusing on the five experience the research revealed that are statistically hierarchical. From highest to lowest import they are:

  • Do I really trust that HR cares about me genuinely as a human?
  • Does HR in some way help me grow and get better?
  • Does HR make me feel known and seen as an individual?
  • Does HR completely make me feel safe?
  • Does HR give me what I need?

“Everything that we do through the lens of HR should be thought of as targeting one or more of those five experiences,” Buckingham says. “If we aren’t, then we’re not really maximizing what we’re doing to build up our overall talent brand.

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