By Kathryn Carlson

Find out how well your program rates in these four areas. Make sure that the money you spend on HR programs goes to hiring and retaining the best employees who in turn improve your overall bottom line.

Average Revenue by Employee

Divide your overall revenue by total number of employees. Your goal is to increase the average revenue by employee year over year. If you hire and retain the right employees, they will be more productive and generate more revenue. This number actually measures the effectiveness of your hiring and retention programs, including recruiting, benefits, pay, training, and development opportunities.

Employee Turnover

Compare the total number of replacement hires to the total number of employees. Your goal is to reduce the turnover among your top performers and find an acceptable level of turnover for your average and low performing employees. To take it a step further, drill down into the specific reasons that employees are leaving so that you can resolve those issues for your top and average employees.  

Employee Engagement/Satisfaction

Engaged employees are more productive employees. The best way to get this number is to use a survey to ask employees directly. For a list of questions and tips for conducting employee surveys in your workplace, check out the KPA webinar “Better Bottom Line Results through Employee Engagement.”

Workplace Compliance

With strong compliance programs, including training on anti-harassment, and non-discrimination, your workplace should see a decrease in regulatory audit findings, along with a decrease in the number of workplace injuries, accidents, and employee lawsuits. To measure the effectiveness of your compliance programs you can track:

• Total number of lawsuits
• • Cost of defense as a percentage of revenue
• Lost time to accidents and injury
• Total number of employee complaints

For additional Key Performance Indicators for effective HR departments, check out the KPA Webinar “High Performance HR- Maximizing People for Profits.”