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Just because you can measure something should you? The proliferation of analytics and management and reporting tools has meant that we can measure the performance and effectiveness of functions and processes as well as specific projects and initiatives, often in real-time. Up pops our performance dashboard with whizzy graphics and we can gather all sorts of metrics about the organisation. However, a new survey suggests that many organisations might be measuring the wrong thing.
The Top Employers Institute, a global human capital management certification and research company, and Dutch HR strategy consultancy Bright & Company, undertook a joint study to find out what activities matter most to achieve business success. Measuring HR Impact found that leadership, performance management and engagement are the three HR drivers considered to have the most impact on business but measuring them doesn’t appear to be a priority for many organisations.
The deep-dive research, carried out on 200 global companies found that of the three, only engagement is widely measured with leadership bottom of the scale when it comes to measurement. Conversely, least likely to impact business results are employee turnover and career and mobility but they are the most commonly measured.
The research found that almost seven in 10 identified leadership in their top five most impactful HR drivers, with more than one third (35 per cent) ranking it first, which was the highest single scoring driver. Both performance management and engagement were selected by approximately three fifths of respondents as a top five driver, with 12 per cent ranking them as having the highest potential impact upon business performance.
One third (32 per cent) measure leadership, which figured below wellbeing (34 per cent) and succession (38 per cent), while two-fifths (41 per cent) measure performance. Staff turnover is measured by two thirds (65 per cent) of respondents, engagement by more than half (54 per cent) and career and mobility (53 per cent).
Alessio Tanganelli, regional director UK of the Top Employers Institute, reckons that a common characteristic of the leading drivers is “their intangibility”. “Measurement is based substantially upon perception and subjective criteria rather than the more objective and calibrated figures applicable to other HR drivers,” he says.
Measuring HR Impact also provides guidance on boosting measurement in these three key areas and serves to underline that while tools exist to gain insight into the way leadership is functioning, few organisations actively measure the way in which their leaders impact business results.
Meanwhile, it found that many organisations are searching for new ways to monitor and maximise employee performance and the value of annual measurement of employee satisfaction is under scrutiny. It suggests one way forward might be to engage employees with short pulse surveys which directly focus on how they contribute to business outcomes.
The research highlights many themes close to Rialto’s heart, not least that there needs to be more accountability at the top in terms of performance. Indeed, increasing board effectiveness is a major area of focus for us in workshops and client discussions.
Similarly, when it comes to engagement, our view is that the annual employee survey is long past its sell-by date and more regular feedback mechanisms should be put in place. Moreover, we believe alongside engagement, it is necessary to find out how aligned individuals are with all aspects of the organisation (from leadership to processes) to boost productivity and improve performance and have developed tools to assess this.
With reams of research and theories devoted to the subject of leadership, it seems nonsensical that it has the least importance attached to it when it comes to measurement. It’s most definitely time to be more measured about what we measure.
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