Human Resource Effectiveness Measures

HR measures outcomes that traditional accounting typically does not explore. Human capital often provides both the biggest value and the biggest cost to organizations; therefore, many metrics reflect people-related costs. Measuring the benefits of human capital is equally important because it shows how effective HR practices help an organization and its employees.

A variety of financial measures can be assessed to show the contribution human capital makes to organizational results. Without such measures, it would be difficult to know what is going on in the organization, identify performance gaps, and provide feedback. Managers should require the same level of rigor in measuring HR practices as they do for other functions in the organization.