Measure organizational effectiveness
Organizational effectiveness stems from a strong company culture, open communication, competent leadership, reliable succession planning and ample opportunities for growth. All of these factors can and should be measured. To start setting goals in your organization and measuring their success, a great approach is to design key performance indicators and create a digital dashboard.
As an HR consultant, I have been developing metrics for organizations for over a decade. In a manufacturing plant, we created a dedicated “war room” containing all monthly metrics, accessible to all employees. The information was not limited to HR-specific data and therefore provided additional knowledge and insights to the entire organization.
Here’s what you need to create your dashboard:
- Management support. If a change initiative or approach is to succeed in an organization, leadership must support that change from within. To sell the idea of measuring organizational effectiveness to your leaders, explain why and how it will benefit the organization. Emphasize that there will be consistent measurement and consistent communication over time – that the effort will not devolve into a “flavor of the month” management fad.
- Align measurements. Each measure must be associated with the specific needs and long-term strategies of the organization. General benchmarking against competitors and industry standards is great, but what is your should the organization measure? Each department should report on their specific metrics at least once a month, more frequently for certain departments and metrics.
- Trash inside, trash outside. Any enterprise resource planning or human resource information system is only as good as the information it contains. Ensure that the information entering your measurement system is accurate and timely. If the input contains errors and inaccuracies, the output will not add value. Rather, dealing with these biased measures coming out the other side will simply become a new task to perform.
- Communicate and evolve. Communicating to the organization the progress of a new effort is critical to its success, as with any change. Communicating the parameters of organizational effectiveness is also essential. Understand the basics. Set smarter goals to make gains in a positive direction. Anticipate questions. Be aware that corrections and improvements will be necessary. Provide as much information as often as you can. Make sure metrics data is accessible to everyone in the organization.
The SHRM Applied Skills and Knowledge Body (SHRM BASK) describes the knowledge, skills and abilities needed to ensure that HR professionals partner with the organization to develop, use and apply effective measures. the Business acumen behavioral competence (and in particular, the Business analysis sub-skill) is particularly important here. Know which system works for your organization and create a dashboard to provide accurate and timely information to your staff.
The HR Metrics Benchmarking SHRM Toolkit offers more details: a strategic benchmarking template, guidance on interpreting data, how to find external benchmark data, definitions and calculations, and additional resources.
Matthew W. Burr, SHRM-SCP, owner of Burr Consulting, LLC, Elmira, NY, co-owner of Labor Love, LLC, is a human resources consultant, assistant professor at Elmira College, and on-call mediator and fact-finder for the Council of New York State Public Employment Relations. He holds master’s degrees in business administration and human resources and industrial relations, as well as a Lean Six Sigma green belt.