Instructor Resource
Kavanagh and Johnson, Human Resource Information Systems: Basics, Applications, and Future Directions, 4e
SAGE Publishing, 2018
1
Lecture Outline
Chapter 14: HR Metrics and Workforce Analytics
CHAPTER OBJECTIVES
After completing this chapter, you should be able to do the following:
➢ Discuss the factors that have led to increased organizational interest in HR
metrics and workforce analytics
➢ Discuss why the information from numeric systems like HR metrics and
workforce analytics do not generate any return on investment (ROI) unless
they lead to different and better decision making
INTRODUCTION
➢ Human resources (HR) metrics and workforce analytics have become
a hot topic in organizations of all sizes. Interest is rising, and
➢ These changes fundamentally altered the dynamics of human capital
Instructor Resource
Kavanagh and Johnson, Human Resource Information Systems: Basics, Applications, and Future Directions, 4e
SAGE Publishing, 2018
2
➢ An important driver is the widespread implementation of integrated
HRIS. The adoption of these systems shifted what had been primarily
paper-and-pencil processes to electronic processes and, as a result,
A Brief History of HR Metrics and Analytics
➢ Systematic work on the development of measures to capture the
effectiveness of an organization’s employees can be traced as far back as
the days of scientific management (Taylor, 1911) and industrial and
organizational psychology (Munsterberg, 1913).
Instructor Resource
Kavanagh and Johnson, Human Resource Information Systems: Basics, Applications, and Future Directions, 4e
SAGE Publishing, 2018
3
Limitation of Historical Metrics
● Unfortunately, while the computing, communications, and software
infrastructure supporting HR metrics and analytics has undergone dramatic
change since the late 1990s, the metrics themselves have not. Current
● Consequently, these metrics emphasize costs or easily calculated counts
(e.g., head count and turnover) that often serve as proxies for costs. Every
managerial decision has cost and benefits consequences, whether we
recognize them or not. As a result, when metrics and analytics systems only
● A second limitation of early metrics efforts is that they tended to aggregate
data to the level of the organization. As such, they offer limited information
that could be used to identify and diagnose within-organization differences.
Instructor Resource
Kavanagh and Johnson, Human Resource Information Systems: Basics, Applications, and Future Directions, 4e
SAGE Publishing, 2018
4
Contemporary HR Metrics and Workforce Analytics
The following points should be emphasized for this section of this chapter:
● The field of HR metrics and workforce analytics is currently in transition.
Because of the development of strong computer-based communications and
greater access to data through integrated human resource information systems,
The Main Objective of HR Metrics and Workforce Analytics
● The emphasis on improving managerial decisions changes the dynamics driving
Using HR Metrics and Workforce Analytics
● There is a fundamental distinction between HR metrics and workforce
analytics. Metrics are data (numbers) that reflect some detail about given
Instructor Resource
Kavanagh and Johnson, Human Resource Information Systems: Basics, Applications, and Future Directions, 4e
SAGE Publishing, 2018
Workforce Analytics
● Workforce analytics refer to strategies for combining data elements into
metrics and for examining relationships or changes in metrics. Understanding
Benchmarking
● The Saratoga Institute’s benchmarking efforts were the first to develop
information on standard HR metrics regarding the use and management of
human capital. Benchmarking data is useful in that it provides insights into
Data Mining and “Big” Data
● Interest in data mining human capital information has been on the rise since
the implementation of integrated HRIS and digitized HRM processes.
Instructor Resource
Kavanagh and Johnson, Human Resource Information Systems: Basics, Applications, and Future Directions, 4e
SAGE Publishing, 2018
6
● Data mining has a number of important applications, but the caveat with its
use is that it can also uncover spurious and nonsensical relationships (e.g.,
taller employees make better leaders; older employees have longer tenures).
● Current interest in Big Data reflects efforts to analyze the extremely large data
sets created by many transaction systems. Often these data sets can be many
Predictive Analyses
● Predictive analysis involves attempts to develop models of organizational
systems that can be used to predict future outcomes and understand the
consequences of hypothetical changes in organizations.
● Efforts to develop balanced scorecards are examples of elementary
predictive systems. They involve identifying leading indicators of important
Operational Experiments
● The evidence-based management movement argues that managers should
base their decisions on data drawn from the organization and evidence about
the actual functioning of its systems rather than using personal philosophies
Instructor Resource
Kavanagh and Johnson, Human Resource Information Systems: Basics, Applications, and Future Directions, 4e
SAGE Publishing, 2018
7
Workforce Modeling
● Workforce modeling attempts to understand how an organization’s human
capital needs would change as a function of some expected change in the
HR METRICS, WORKFORCE ANALYTICS, AND ORGANIZATIONAL
EFFECTIVENESS
● HR professionals tasked with reporting metrics often question whether these
efforts have had a significant impact on organization effectiveness. They
● HR metrics and analytics compose an information system, and information
systems can only have an impact on organizations if, as a result of the
Instructor Resource
Kavanagh and Johnson, Human Resource Information Systems: Basics, Applications, and Future Directions, 4e
SAGE Publishing, 2018
Better Problem Solving and Decision Making
In organizations, decisions result in tactical choices that may be among alternatives to
A Common and Troublesome View
A common perspective adopted in many organizations is that data elements lead to
metrics. These metrics can then be combined in various analyses that can then be
A more effective approach is to start with the problems or opportunities faced by the
organization and develop an understanding of what information is likely to be
useful to managerial decisions. An understanding of these problems determines the
analytics that will be useful in improving organizational effectiveness. These analytics
All organizations have ultimate outcomes of interest. For profit businesses, these
ultimate outcomes center on some combination of revenues and costs. But how those
Instructor Resource
Kavanagh and Johnson, Human Resource Information Systems: Basics, Applications, and Future Directions, 4e
SAGE Publishing, 2018
9
outcome that may be influenced by earlier outcomes and may influence subsequent
outcomes. Further, each outcome itself may be capable of being influenced by the
actions of an organization’s employees. Linking these outcomes creates a framework of
useful organizational metrics and analytics.
Opportunity Domains of HR Expertise
Excellence in human resources functioning requires three sets of expertise. First, an
organization must have access to the knowledge in centers of excellence to potentially
change the activities of HRM. This access to knowledge refers the “know–how”
required to deploy available human resource programs (e.g. recruitment, selection, job
design, etc.) to improve organizational effectiveness.
HR Process Efficiency
Each of the three areas of expertise represents a separate domain in which organizations
Instructor Resource
Kavanagh and Johnson, Human Resource Information Systems: Basics, Applications, and Future Directions, 4e
SAGE Publishing, 2018
10
Organizational Effectiveness
HR metrics and workforce analytics focused on organizational process improvement
are primarily focused outside the HR department. The objective is to utilize the
Strategic Realignment
Strategic realignment involves the set of activities most commonly known today as
human resource planning (HRP; for more detail, see Chapter 11). These planning
MEASUREMENT, METRICS, AND ANALYTICS BASICS
Getting Started
When undertaking a metrics and analytics effort, the first question the organization
The Role of “Why?”
An important test of the appropriateness of outcome metrics is the “why” test. When
Instructor Resource
Kavanagh and Johnson, Human Resource Information Systems: Basics, Applications, and Future Directions, 4e
SAGE Publishing, 2018
11
Putting HR Metrics and Analytics Data in Context
Reporting HR metrics data alone is ineffective in leading to improvement in managerial
decision making. Data points representing important organizational outcomes become
Reporting What We Find
For individuals conducting metrics and analytics work, paying attention to the
capabilities and needs of the targeted audience is critically important. The information
reported must be relevant to the issues facing the managers who receive it. Further,
Dashboards
Dashboards are a component of reporting. Dashboards reflect efforts to align real-time
analysis of organizational and HR processes, as well as an increased capacity to
aggregate organizational data.
Instructor Resource
Kavanagh and Johnson, Human Resource Information Systems: Basics, Applications, and Future Directions, 4e
SAGE Publishing, 2018
12
Infographs
In many instances, pictures can provide a more compelling way to present the story
Useful Things to Remember About HR Metrics and Analytics
Don’t “Do Metrics”
The primary objective of developing capabilities in HR metrics and workforce analytics
is to increase organizational effectiveness. It is not simply to generate a static menu of
HR metrics reports.
Bigger Is Not Always Better
The success of any metrics and analytics project is not measured by how many people
HR Metrics and Analytics Is a Journey—Not a Destination
Because the focus is on identifying and responding to opportunities and problems,
Be Willing to Learn
Organizations that have an HR metrics and analytics function will develop a bias for
Avoid the Temptation to Measure Everything Aggressively
Not every HR function, process, or metric that can be analyzed should be. Successful
efforts will focus on those things, at a given point in time, that are most likely to have
Instructor Resource
Kavanagh and Johnson, Human Resource Information Systems: Basics, Applications, and Future Directions, 4e
SAGE Publishing, 2018
13
HR Metrics and the Future
The development of useful and effective HR metrics and workforce analytics is likely
to be viewed in the future as a very significant source of competitive advantage. We
now have the tools and the computing infrastructure to handle these projects that can
Some managerial benefits of metrics for organizations are as follows:
● Operational reporting is more efficient and cost-effective because the data from
individual applications is integrated and accessed through a single solution.
CHAPTER SUMMARY
The central focus of this chapter was to define the domain of HR metrics and workforce
analytics and discuss how they can contribute to improving organizational
effectiveness. HR metrics are data elements that contribute to analyses that provide
Instructor Resource
Kavanagh and Johnson, Human Resource Information Systems: Basics, Applications, and Future Directions, 4e
SAGE Publishing, 2018
14
This chapter also highlights the wide range of activities that fall within the domain of
HR metrics and workforce analytics. Although classic metrics offered some value in the