Human Resource Practices in Organizations : Measurement and Evaluation Techniques

There is pressure on Human Resource (HR) function of the organization to measure its contribution in the increasingly competitive and cost effective environment. HR departments are evolving from playing a merely administrative role to becoming "strategic partners" responsible for contributing to the achievement of long term organizational goal and objectives. HR is moving away from the transactional, hiring/firing support function to a bottom line business decision maker. HR evaluation is often simply not conducted because of its inherent difficulties in measurement and evaluation of results. However, the concern for measuring HR contribution is gradually increasing. Changing focus of HR also requires that new ways of defining and assessing HR success be developed. As a firm’s HR assets are impinged by different types of uncertainties originating from various sources, organizations need to use HR options created by different HR practices. Measurement of flexibility offered by HR practices requires some innovative approach such as Extended Net Present Value (ENPV). Measuring HR practices makes good economic sense to a HR’s contribution to the organization by providing convincing evidence. Return on People (ROP) is a logical approach for identifying the important elements and critical variables of HR or people investments and integrating them in a way that enhances HR decisions