HR KPI pitfalls - Do not make these 9 mistakes!

HR KPI pitfalls

We can measure everything, but what is important to measure when we are talking about Key Performance Indicators (KPIs) within human resources?

1. If you set up a KPI you will start a behaviour

• For example if you start measuring errors in the process of hiring new talents, as a side effect you may get a change in the company culture that everybody is scared of making mistakes and therefore is sending emails with lots of cc's to cover their back

2. Generic metrics can sometimes be ineffective or less useful for several reasons

• Lack of alignment: Generic metrics may not align with the specific goals and objectives of an organisation. Each organisation has its unique strategic priorities, and using generic metrics may not capture the nuances and complexities of those goals, making the metrics less meaningful and actionable

• Limited contextual relevance: Metrics need to be relevant to the context in which they are applied. Generic metrics often fail to capture the specific circumstances, industry dynamics, or organisational culture that impact performance. Without this context, the metrics may not provide a clear understanding of the actual performance or progress being made

• Inadequate customisation: Organisations often have unique needs and challenges that require customised metrics to measure success effectively. Generic metrics may not take into account the specific requirements or nuances of a particular organisation, leading to inaccurate or incomplete assessments of performance
• Failure to capture complexity: Organisations are complex entities with multiple interrelated factors influencing their success. Generic metrics may oversimplify this complexity and fail to capture the multidimensional aspects of performance. Consequently, they may not provide a comprehensive view of the organisation's strengths, weaknesses or opportunities

• Lack of actionability: Metrics should provide actionable insights that drive meaningful change and improvement. Generic metrics often lack specifics and the granularity required to identify actionable steps or interventions. Without this level of detail, organisations may struggle to make targeted improvements based on the metrics alone

• Ignoring unique stakeholder needs: Different stakeholders within an organisation may have different information needs and perspectives. Generic metrics may not address the specific requirements of these stakeholders, leading to limited engagement or usefulness of the metrics in decision making processes

• Insufficient benchmarking: Generic metrics may not provide a benchmark for comparison with industry standards or best practices. Without proper benchmarking, organisations may struggle to understand how they measure up against their competitors or identify areas for improvement

3. HR KPIs are not a 365 day recurring plan

• HR KPIs are due to the HR strategy plan, but you can also be able to make KPIs for time limited projects

4. You may have goals without a KPI

• Let's say your company's strategy is to attract the best people within your industry. How will you measure that? Are the best employees the graduates with the highest grades? Are the management team, the HR department and the team leader aligned so everyone agrees on what defines: The best? Is "the best" a skill, a personality, an experience or maybe a salesperson who will be able to attract a lot of new clients?

5. The company culture affects the HR metrics

• It makes a world of difference if the company is embracing empowerment and the purpose way of working compared to a hierarchical organisation

6. Mutual metrics vs. individual metrics

Mutual goals and individual goals are two different types of goals that exist within an organisational or team setting. It makes it harder to implement the HR metrics.

Alignment:

• Mutual goals: Mutual goals are aligned with the overall objectives and mission of the organisation or team. They promote a sense of unity and cohesion, as everyone is working towards the same desired outcome
• Individual goals: Individual goals can be aligned with both mutual goals and personal aspirations. They reflect the specific roles, responsibilities and career development needs of individual team members 

Focus:

• Mutual goals: Mutual goals emphasise collective success and the overall performance of the team or organisation They encourage collaboration, cooperation and the sharing of resources and information
• Individual goals: Individual goals focus on personal achievements, growth and performance. They help individuals define their responsibilities, track their progress and contribute to their professional development 

Interdependency:

• Mutual goals: Mutual goals often require interdependent efforts from team members. Success in achieving these goals relies on effective communication, cooperation and coordination among individuals to maximise synergies
• Individual goals: Individual goals can be pursued independently by team members. While collaboration and support from others may enhance individual goal attainment, they are primarily driven by the efforts and actions of the individual 

Measurement and Evaluation:

• Mutual goals: The progress and success of mutual goals are typically measured at the team or organisational level. Key performance indicators and metrics are used to assess the collective achievement of these goals
• Individual goals: Individual goals are measured based on the progress and outcomes of each individual team member. Performance evaluations and assessments are often conducted to gauge individual goal achievement

7. Are we only having HR metrics to save our HR budget?

• A common used practise within HR is to make as many key performance indicators so it's possible to show the stakeholders the best KPIs and thereby get the same budget as a minimum for the upcoming year

8. HR is not a part of the company strategy process

• If the HR department is not a part of the company strategy process you may struggle a lot. For example, if the management decides to have a growth strategy that may have a great impact on your schedule, for example are we talking about enlarging the production, are we looking for a new location close or far away from your current location. Starting up a business hub in another country might be a huge task for the HR department

9. Do not operate on the whole patient if only the arm hurts

• The final pitfall is that you have a red flag within one of your HR metrics. If you have a completion rate to measure then different departments might have different issues. Like the example mentioned before: If the company has a growth strategy it might impact the completion rate within the sales team for a limited time as the team has to onboard new sales reps

If you focus and act on these 9 HR pitfalls you are doing great.

If you want to learn more about HR KPIs please feel free to click below.