It's time to reinvent management. You can help.


jon-ingham's picture

NOT Linking HR Metrics to Financial Outcomes

By Jon Ingham on June 8, 2013

The most important things we produce in HR aren't easily measurable.  Take Gary's triangle of engagement needs - things at the botttom like attendance, compliance, obedience are easy to measure.  Things at the top like passion, pride, creativity, love aren't.  The result of trying to monetise HR outcomes is that we end of focusing on the wrong ones.

Good HR is one of the key enablers to adaptable organisations and tying our metrics to financial outcomes cleary reduces our organisations' ability to adapt.

It also anchors our organisations in BAU mode.  Much more important that linking HR to the way we currently run our businesses is helping businesses understand why things need to be managed differently.

We can manage what we can't measure and we need to build tolerance for leading in areas of increased ambiguity, including in HR.


HR process being hacked:HR Metrics and Information Systems

You need to register in order to submit a comment.

malcolm-oneal's picture

Jon - wanted to share one of my favorite quotes, "Not everything that counts can be measured. Not everything that can be measured counts". - Albert Einstein.

I agree that the pursuit and journey of much of an organization’s growth and capacity is not a financial measurement, but rather a bellwether of future success.

perry-timms_1's picture

I've long said that you need alternative "value" measures to £s or $s. You're right that in attempting to measure everything like this we can create more doubt that allowing for intangibles. The Bhutanese measuring their Gross National Happiness (which surprises me that Henry Stewart hasn't set up a 2nd home there) shows there are ways to measure other things or is that simply a Government gimmick?

Some way of describing how adatability traits are valued and the price of not being adaptable will hopefully persuade those hooked on metrics to look wider and take them into account.

Thanks for the hack Jon and the comment Malcolm.


ulrich-nettesheim's picture

Jon, remember the days of "the balanced score card"? While I agree with you that trying to evaluate every HR practice against financial outcomes is folly, not trying HR to financial outcomes I would argue is also not the answer. Perhaps HR needs to be more central in the debate in the C-suite around what does need to get done to achieve the purpose of the organization. And then figure out what balanced set of indicators (including but not limited to financial impact) would help leaders,employees, shareholders and the marketplace know whether things are improving, stalling or decreasing. And if the measurement system includes a strong bias towards adaptability, all the better. Thanks for your comments!