How are HR professionals evaluated and appraised for their performance?

Like any other function in an organisation, there are enough and more indicators to measure the performances of HR personnel.

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HR professionals are responsible for evaluating and appraising employees across levels and divisions based on pre-determined targets set for each of them by their managers. In the same context, how are HR professionals evaluated and appraised? Are there targets that can be quantified for them too?

This discussion was born in a recent meeting with a CHRO of a big IT multinational. Incidentally, we were quite amazed by the frequency with which he was churning out-of-the-box ideas from his office. We couldn’t stop ourselves from asking him, how he got so much time from his regular work to plan a marathon of activities. Was it because HR does not have gruelling targets unlike people from marketing, sales, finance and production?

Laughingly he revealed that they also have targets, such as keeping the attrition rate low, acquiring talent quickly, and more.

Apparently, goals are set for each one of the HR professionals depending upon the role they play in an organisation— it could be HRBP, HR operations, HR generalists, L&D and rewards. Now, all these roles have an undercurrent, which unites them under one purpose, and that is, employee satisfaction.

HRKatha spoke to Rajesh Padmanabhan, the group CHRO of Welspun Group to initiate a dialogue on this topic.

“We typically use a five-step matrix to measure HR professionals. There is enough and more data available to do so. In the case of an HRBP, it is important to measure the business impact creation. Therefore, enabling business growth and enabling profitability are two indicators,” says Padmanabhan.

Business growth enablement in the form of having the right sales incentive plan or variable pay-plan in place, which fosters business performance, is a measure of success. Also, HR contribution to EBITA (earnings before interest and taxes) year on year through optimal manning (non-linear) is a reflection of measurable success. This way, it is possible to see how closely an HRBP works with the business through the measurable lens of top-line and bottom-line contribution.

“HR professionals in today’s competitive world are equally responsible and measured in terms of metrics and goals compared to any other business functions. Business leaders and CEO’s are cognizant of the critical role HR plays in the growth and culture of an organisation,” says Srinath Krishnan, country manager-total rewards, HPE India.

Rajesh Padmanabhan

“We typically use a five-step matrix to measure HR professionals. There is enough and more data available to do so. In the case of an HRBP, it is important to measure the business impact creation. Therefore, enabling business growth and enabling profitability are two indicators”

Moreover, employee surveys primarily bring to the surface areas in which HR professionals need to redesign practices. For instance, if the employees’ feedback shows a 45 per cent satisfaction for, let’s say, the insurance policy, then it becomes an area of concern for the HR and triggers a deep dive to find a solution.

For HR professionals, the commitment required to meet their goals is no less than any other professional, such as sales and finance. Is the latter more quantifiable and the former more comprehensive, we wonder!

“Like a finance or sales function where the revenue data is clearly available HR function is also clearly accountable and is measured, for example employee satisfaction survey may include specific targets in terms of improvement in scores year on year such as 80-85 per cent,” shares Krishnan

“The HR COE is measured on process improvement. For instance, capability building of relevance in our case is measured through an ROI method of a ‘Delta Change’ in proficiencies, and its applicability to the business and creating business value. Creation of new initiatives, such as measuring culture change is another step which we have taken,” says Padmanabhan.

“Ability to retain talent in single digits is an important area where almost all professionals are measured. Moreover, measuring the health of the organisation and also succeeding in making a company an employer of choice”

“Self-development and team building are also important measures. So, building the right development plan for self and team is important and must be achieved throughout the year. This has a positive weightage for achieving and a negative score for missing out. In Welspun, this is taken very seriously,” says Padmanabhan.

“Ability to retain talent in single digits is an important area, where almost all professionals are measured. Moreover, measuring the health of the organisation and also succeeding in making a company an employer of choice by participating and winning in best employer category is another dimension HR folks get evaluated on,” points out Krishnan.

Another important requirement is to ensure good governance at all points of time. Measurement of HR processes and practices through surveys, audits and a parallel ‘maker-checker’ process of responsibility, accountability, consultation, information (RACI), establishes a measured governance model.

“Finally, employee engagement for us is through periodic pulse surveys administered via open source platforms. The change in pulse score over a time period is seen as the HR’s direct contribution to business in terms of happiness, engagement and fulfilment,” concludes Padmanabhan.

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