How to determine your success KPIs in HR?

By Jaap Veldkamp and Heleen Goet

Introduction

In today’s dynamic business landscape, HR plays a pivotal role as a strategic partner for organisational impact. Within HR’s extensive portfolio the critical question arises: is HR doing the right things and are they doing this effectively?

The answer lies in establishing a clear link between each HR service and its impact on (business) outcomes. Picture it as a chain: a new leadership program is introduced (activity) striving for 90% leader participation (throughput), aiming to enhance their knowledge and/or change behaviour (output), ultimately contributing to increased sales (outcome). The approach of having this “logical framework analysis” for all of your services ensures a focused and result-driven HR strategy aligned with overarching business goals.

The 'Define your success' Workshop

To help our HR colleague in creating this logical framework analysis, we designed a workshop called ‘Define your success’. In this workshop our HR Analysts sit together for a few hours with those involved in one specific HR topic like recruitment or succession management. In an engaging workshop, we check if a team’s activities are logically related to their objectives. This sounds logical, but it isn’t. Often people know exactly what they do and have even defined throughput or process KPIs, but people become more vague when they have to name the main goals of their product in output/outcome KPIs.

“The workshop is an intervention in itself.”

Before we dive into the details of this workshop, it is appropriate to say that the workshop is an intervention in itself. Team leads indicate time and time again that having a structured discussion with their team about what they do and why is in itself extremely valuable.

The workshop consists of three separate parts:

• Which HR services are your responsibility? Could you elaborate on the HR services for which you bear responsibility? In this workshop, we deliberately concentrate on core services, steering away from the broader spectrum of adjacent tasks typically undertaken by individuals. After all, such services are reflected in workshops by other colleagues who do feel responsible for them.
• Who are your primary clients? We look at more than a dozen possible clients and let our HR colleagues select the most important ones. Possible clients can be a hiring manager, employee, external clients, business manager, business MT, society, compliance department, etcetera. We give each team member 10 chips of a colour, and everyone can distribute these separately among the clients (for example one chip per client, but also two clients with five chips each). This way we quickly see which clients are primarily served (most chips), and by working with different colours we quickly see for which clients we have (dis)agreement about their importance.
• Are your primary clients happy? We select the most important clients from step 2, and let them tell when these clients are happy. We on purpose don’t mention the word KPI, because that can be deterrent. But in the end it is the same: if we have clear how we would like to make a client happy, we can reformulate it into a KPI.

The main goals of this workshop is to link the three separate stages of the workshop: we match the described services (step 1) with the main KPIs (step 3) for each client (step 2). In other words, we create one flow diagram, linking all services (activities) via throughput to output and outcomes.

This diagram provides insight in:

• Are all activities logically linked with our goals? Do we have evidence for all the connections we hypothesize? Or do we need to validate some of them via statistical research executed by People Analytics?
• Do we know for each KPI how to measure it? Is the data available for us? What is the data quality?
• Which gaps are derived from this analysis? In the fictional example above, you see that the ambition to improve the learning culture can’t be linked to any activity currently executed by the team.
• How to prioritise the backlog. In other words, which activities are given priority e.g. while looking at those KPIs that score the lowest.

It is good to mention that this workshop can be used for both new and existing HR services. We facilitated this workshop many times, and also, for the more experienced teams, it turned out to be very valuable. Since everything around us is changing rapidly, for each team, it is good to keep asking the questions: are we still doing the right things, and (if yes) are we doing them right?

“Are we still doing the right things, and (if yes) are we doing them right?”

Collateral benefits of the workshop

We notice that our involvement in structuring a team’s line of thinking of their activities and goals is much appreciated. We join forces with each team to ensure HR focuses on the right activities to reach the highest impact. Finally, it is nice to mention two great side effects that popped up during our journey so far.

• It increases collaboration between HR departments. Maybe not surprisingly, but many HR departments have the same clients and goals. For example, attracting young professionals is something many colleagues are working on: reward, traineeship, talent attraction, employer branding, etcetera. Providing this insight in a structured way by combining the separate logical frameworks results in better collaboration between the different teams.
• By facilitating these workshops, the HR Analytics department can take on a broader advisory role within HR. After all, we gain structured insight into important data points that are missing, which overlapping goals there are between teams, where evidence between services and their goals is still lacking (input for People Analytics research), where it is important to set up a thorough evaluation plan, etcetera.

Final note

We are definitely not there yet, but we started a journey to create a culture in which everybody within HR is asking the two most important questions:

• are we doing the right things, and
• are we doing them right?

We do hope that you appreciate us sharing our thoughts on this topic. By no means we claim this approach to be the only right one. But we do hope our thoughts inspire you to start thinking about evaluation in order to maximise the impact of HR. Please feel free to engage with us and share your comments and thoughts.