How to measure effectiveness of Human Resource?

Updated: Jan 18, 2019 UTC
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Human Resource plays a key role to monitor employee performance with the aim of maximizing the company’s profitability and efficiency. HR departments should also focus on having their effectiveness monitors for the exact same reason. It can be hard for companies to measure the effectiveness of its HR tangibly. There are a vast array of everyday aspects of a business that are managed and controlled by Human Resources making it difficult to monitor. With the role of HR continually updating and adapting due to the changes in workplace demand and new technologies, measuring the effectiveness of HR is becoming more essential. A lot of companies don’t know what to look for when it comes to measuring HR success. It would perhaps be unrealistic, costly and time-consuming to analyze and evaluate all aspects of HR.

Employee Retention

One of the biggest measures of HR success is employee retention without a doubt. Rates of retention show if the hiring techniques are working effectively and HR is helping to find the right candidate for the firm or not. They also go a long way to indicating the happiness in the workforce and employee engagement, after all, the happier the employee, the lesser the chances of turnover in the organization. Employee retention is easy to measure and can be done on an annual basis, quarterly basis, weekly or even regularly without the need for much manpower. 


Another crucial role of HR is to provide training and development opportunities to the staff and transparent career path which can boost their career growth. Therefore, a large number of annual internal promotion would suggest a strong employee development in a firm. It will prove that the role of HR in mentoring and training is helping the employees to climb up the corporate ladder and hence is effective. It is true that granted promotion not only depends upon the specific staff training programmes, but there is no doubt in the fact that it is an indicator of the overall development of company which is at least partially influenced by HR initiatives.

Employee Satisfaction

How to find employees are happy or not ? Employee retention and promotions are relatively easy to calculate whereas measuring employee satisfaction is not quite the same and is a bit trickier than that. One of the most effective ways to measure the happiness of your staff is by offering your workforce with a satisfaction survey. Surveys that can be done in private and personal capacity tend to provide the most reliable and honest results. This is because the employees are not put under face to face, immediate pressure to respond. HR is responsible for all the regular operations in an organization - managing everything from disciplinary action to payroll to mediation. Employee satisfaction is a good measure of the effectiveness of the HR department in any company. It is certainly true that the workers are productive only when they are happy and HR make sure that this is truly the case in every ideal organization. Listen to your employees and make better relations and  ensure that the line managers understand the requirement of staff managers, ask your employees for their feedback. It is the only way to determine if your company is on the right track internally.

Company Culture

HR plays a vital role in building a strong company culture in business. Companies with a strong culture tend to see improvements in talent acquisition and retention. HR make sure that all the employees are on the same page and it promotes this culture across the company. Ensuring there are no pay gaps among different genders, having transparency, equality, and diversity are all the measures companies should be taking to build a strong company culture.


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